Word on the street is that this is the first shellacking the Navy will give out, and not the last. Not only are costs exploding, but technical merit is evaporating and schedule is sliding. The triple whammy is now being discussed as grounds to cancel. The original contract award was part of the thanks to Blair and Berlusconi for the Iraq war, and now that neither is in power and the Bush team has literally no political power, the Navy is watching the Lockheed team very carefully. Any more foul-ups, and they will build a case to dump the program and either re-compete or just pick another.
The Lockheed littoral ship contract has Congress up in arms, as a perfect showcase of what could happen.
You can believe that Lockheed is making no money, this program was awarded based on "award fee" as the only way to make profit, where 10% of the program money is available if the contractor makes the cost and schedule milestones, and 0% if they do not. 0% means that they contractor is paid for the worker's time, at overhead rates, so they don't lose money, but they don't make any profit. No profit means they might as well be a charity, and shareholders take a dim view of that!