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Lockheed, whose shares were down 6.4% in early trading, said in a statement that it was “premature” to speculate about the proposed budget.
“The Department (of Defense) cannot confirm specific budget details until after the FY23 President’s Budget is released,” a Pentagon spokesperson said.
Reuters reported last month that U.S. President Joe Biden was expected to ask Congress for a defense budget exceeding $770 billion for the next fiscal year, compared with $778 billion in 2022.
The budget is expected to benefit the biggest U.S. defense contractors, including Lockheed, Northrop Grumman Corp (NYSE:NOC) and General Dynamics Corp (NYSE:GD).
“This is a significant issue for the program,” Cowen analyst Roman Schweizer said, referring to the news on request for fewer F-35s.
Several factors from high operating and maintenance costs to difficult contract negotiations might have contributed to the development, Schweizer said.
The F-35 is one of the world’s most advanced fighter aircraft and considered a highly sensitive export, sold only to the closest allies of the United States.
Lockheed Martin delivered a total of 142 F-35 fighter jets to the United States and its allies last year, three more than originally planned.
