Lockheed Martin Corp. on Friday reported a 20% increase in revenue from its IT outsourcing business in the fourth quarter. Sales for the company's technology services group, which includes Lockheed Martin Information Technology, were $947 million, compared with $791 million a year earlier. The group also more than doubled its profit--from $25 million in fourth-quarter 2001 to $55 million in the quarter ended Dec. 31.

For the year, revenue at the contractor's technology group increased to $3.1 billion, compared with $2.7 billion in 2001.

Lockheed says much of the growth in the sector was attributable to an increase in government outsourcing contracts. That stands to reason. Analysts say a push by the federal government to privatize a good portion of IT work is giving the otherwise hard-hit services sector a boost. A recent study by Input, a research firm that watches federal spending on IT, says the government's spending on IT outsourcing will increase at a compound annual growth rate of 18%--from $6.6 billion in fiscal year 2002 to nearly $15 billion in 2007.

During the fourth quarter, the Department of Energy announced a five-year renewal of Lockheed's management contract for Sandia Laboratories. Lockheed Martin says sales of IT outsourcing services to private-sector customers were lower during the period.

Overall, Lockheed Martin said sales for the year increased 11%, to $26.6 billion. Earnings from continuing operations were $533 million, or $1.18 per diluted share. In 2001 the company posted earnings of $43 million, or 10 cents per diluted share.