Lockheed Martin Corp. reported second quarter 2007 earnings of $778 million, a 34 percent increase over profits of  $580 million for the same period of 2006, the company announced July 24. Revenues improved from $10 billion to $10.7 billion in the same period.

Net sales for Lockheed Martin’s space systems segment slipped 2 percent to $2 billion for the most recent quarter, which closed June 30. The company said it had expected the sales decline given the formation of the United Launch Alliance (ULA) joint venture with Boeing and the divestiture of the International Launch Services business in the fourth quarter of 2006. Lockheed Martin no longer records sales on Atlas launch vehicles and related support to the U.S. government, as ULA is accounted for under the equity method.

Space systems operating profit improved from $189 million in the 2006 second quarter to $214 million in the 2007 second quarter, as increases in satellites and strategic and defensive missile systems activities more than offset declines in space transportation. Satellites, in particular, saw an increase due mainly to higher volume and improved performance on government satellite activities, which more than offset declines in commercial satellite activities. Lockheed Martin’s only commercial satellite delivery of 2007 to date was in the second quarter, compared with three during the first six months of 2006.

The company said that going forward, it will continue to pursue new commercial business on a selective basis. “We will be looking for those opportunities where the A2100 platform and related technologies confer a competitive advantage and where the customer desires the mission assurance, reliability, and performance that are the hallmarks of our offerings,” spokesman Scott Lusk said in an interview. “We expect the commercial communications satellite market to be relatively flat for the foreseeable future. Growth factors including [high-definition TV], mobile entertainment services and broadband access will be countered by continued consolidation of satellite operators and, to a lesser extent, by the continued involvement of private equity in the sector.”