US defence giant Lockheed Martin is considering flogging off its under-performing government IT division.
During an announcement about its second-quarter financial results the company said it will conduct a strategic review of the government IT infrastructure services business.
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The programmes to be reviewed represent approximately $6bn (£3.8bn) in estimated 2015 annual sales, and approximately 17,000 employees, it said.
"The corporation expects the strategic review will result in a spin-off to its shareholders or sale of these businesses," it said.
Georgina O'Toole, analyst at TechMarketView, noted that total sales at Lockheed Martin remained stable at about $21.8bn (£14bn) for the first half of 2015. In contrast, net sales fell by 9 per cent to $3.7bn (£2.4), with profits nosediving from $296m (£190m) to $160m (£102m).
According to O'Toole, Lockheed is estimated to have turned over £270m in the UK last year.
Some of its high-profile government contracts include the increasingly troubled Future IT Sourcing programme at the Ministry of Justice, a programme operating the so-called Service Integration and Management (SIAM) model.
It also runs the Command & Control system contract with the Met Police and an application services contract with the Highways England.
O'Toole said: "It appears that IT services is a very different proposition to defence manufacturing & services, and we suspect Lockheed has found SIAM is a very different game to a managing a large defence programme. The planned spin-off highlights that the two don’t necessarily mix well." ®