Because the F-35 doesn’t make Lockheed Martin’s accounts shine too much
Lockheed Martin reports an increase in revenues in the third quarter thanks to demand for its military products supported by geopolitical tensions. However, aviation segment revenue fell 5% year over year as the company says F-35 jets face delivery delays due to increased demand.
Chiaroscuro quarterly for Lockheed Martin.
The US defense giant reported net earnings of $1.7 billion, or $6.73 per share, in the third quarter of 2023, compared to $1.8 billion, or $6.71 per share, in the third quarter. of 2022. The largest military contractor in the world closed the quarter ended September 24 with a net turnover of 16.9 billion dollars, compared to 16.6 billion dollars in the third quarter of 2022 (+2%). Cash from operations was $2.9 billion (vs. $3.1 billion a year ago), while free cash flow was $2.5 billion (vs. $2.7 billion dollars a year ago).
However, Lockheed is still hampered by pandemic-related labor and supply chain disruptions in its aircraft segment that produces the advanced F-35 fighter jet. As a result, sales at its aviation unit , its largest by size, saw a 5.2% decline in the third quarter.
However, Lockheed Martin confirmed its 2023 outlook, with net sales between 66.25 and 66.75 billion dollars and earnings per share between 27.00 and 27.20 dollars.
All the details.
THE WAR IN UKRAINE PUSHES (AGAIN) LOCKHEED MARTIN'S REVENUES
Quarterly net sales rose about 1.78% to $16.88 billion for Bethesda, Maryland-based Lockheed Martin.
The ongoing war in Ukraine has prompted the supply of weapons and ammunition such as shoulder-fired missiles, artillery and other armaments, providing US defense companies with substantial contracts with the Pentagon, Reuters reports, adding that weapons produced by Lockheed Martin, such as the of Gmlrs multiple-launch guided rockets and the Javelin anti-tank missiles, made in collaboration with the defense company RTX, proved crucial to Ukraine's war efforts.
In fact, the revenues of the Missiles and Fire Control unit, which produces the high mobility artillery missile system, were 2.94 billion dollars, up 3.8% compared to the previous year.
WHAT HAPPENED TO THE LOCKHEED MARTIN AERONAUTICS DIVISION, RESPONSIBLE FOR THE F-35 PROGRAM
The same can't be said in Lockheed Martin's aircraft revenue segment fell 5% year-over-year and the company says F-35 jets are experiencing delivery delays due to increased demand.
Last month the company cut its full-year F-35 jet delivery target due to supplier delays and delayed deliveries of its upgraded Technology Refresh 3 (TR-3) jets, Reuters had revealed. TR-3 is the critical upgrade to the F-35's computer processing electronics. “The number of F-35 deliveries in 2024 will depend on when the first TR-3 configuration aircraft is delivered and the time required to complete the customer acceptance process,” the company said last month.
The fifth-generation fighter has received a surge in demand following heightened global volatility, according to Bloomberg Intelligence , however deliveries will be delayed until the TR-3 software that powers the most advanced version of the jet is approved.
THE WORDS OF THE CEO
“Our third quarter results met or exceeded our expectations across the board, generating $2.5 billion in free cash flow, with nearly 100% returned to shareholders through dividends and share repurchases,” said the CEO Jim Taiclet – Our order book remains strong at $156 billion as both domestic and international orders have been strong.”
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/perche-lf-35-non-fa-brillare-troppo-i-conti-di-lockheed-martin/ on Tue, 17 Oct 2023 14:49:26 +0000.