UPDATE 3-Lockheed Martin sees 2010 below Street--stock down

*Q3 EPS $2.07 vs. estimate $1.83

*Q3 revenue $11.06 bln vs. $11.4 bln estimate

*2010 forecast affecting shares; down 6 pct (Adds analyst comment)

By Karen Jacobs

ATLANTA, Oct 20 (Reuters) - Lockheed Martin Corp (LMT.N: 行情) posted better-than-expected quarterly profit, aided by a lower tax rate on Tuesday, but the defense contractor forecast 2010 earnings and revenue below Wall Street estimates, sending its shares down 6 percent.

"Wall Street is beginning to get the true outlook" for Lockheed as President Barack Obama slows defense spending growth and cuts some weapons programs, said Paul Nisbet, an analyst with JSA Research.

"The industry is in for a tough few years under Obama," Nisbet added.

This year, U.S. cancellations of defense programs such as the VH-71 presidential helicopter and the scale-back of some missile programs have hurt Lockheed's backlog and forced it to cut jobs in some divisions.

Pentagon terminations have "resulted in a loss of revenue and profitability that cannot be made up in the near term," Lockheed Chief Executive Robert Stevens said during a conference call.

He added that Lockheed was also beginning to see the impact of the wind-down of its F-22 Raptor warplane, due to end production in 2012, and said expanding margins could be difficult in coming years as lower-margin work accounts for more of the company's backlog.

FORECAST BELOW CONSENSUS

For next year, Lockheed forecast per-share profit in the range of $7.05 to 7.25, down from its 2009 profit forecast of $7.40 to $7.60. Analysts had expected profit of $7.89 for 2010, according to Thomson Reuters I/B/E/S.

Revenue of $46.3 billion to $47.3 billion is expected for 2010, compared with analysts' average estimate of $47.6 billion.

Lockheed, the top supplier to the Pentagon, promoted Christopher Kubasik to president and chief operating officer, effective Jan. 1, as part of a reorganization designed to help it improve operations and deliver products at lower cost.

Net earnings came to $797 million, or $2.07 a diluted share, for the third quarter, up 2 percent from $782 million, or $1.92 a share, a year earlier.

The company said the latest results include a pension adjustment and a tax benefit from the resolution of a U.S. Internal Revenue Service examination that together decreased per-share profit 4 cents a share.

Analysts had expected profit of $1.83 a share for the quarter, according to Thomson Reuters I/B/E/S. Third-quarter revenue rose about 5 percent to $11.06 billion, but was short of the $11.40 billion expected by analysts.

Lockheed shares were down $4.58, or 6 percent, at $72.41 in afternoon New York Stock Exchange trading. Rival Northrop Grumman Corp (NOC.N: 行情) was off $1.56, or 3 percent, at $49.63 and General Dynamics Corp (GD.N: 行情) fell $1.38, or 2 percent, to $67.32. (Reporting by Karen Jacobs, editing by Gerald E. McCormick and Maureen Bavdek)