This post was originally published on this site
https://i-invdn-com.investing.com/trkd-images/LYNXMPEJ6H0EI_L.jpg
(Reuters) -U.S. weapons maker Lockheed Martin (NYSE:LMT) on Tuesday raised its annual profit and sales outlook as conflicts such as the war in Ukraine stoked demand for military equipment.
But shares of the company were down around 2.5% over continued supply chain concerns and F-35 deliveries.
Defense companies in the U.S. have been successful in translating demand for air defense systems, missiles and other weapons into orders, triggered by the Ukraine conflict and increasing tension in U.S.-China relations.
“We think this is a longer term essentially ‘sea change’ in national defense strategy for the U.S. and for our western allies,” Lockheed’s CEO Jim Taiclet told investors on a post earnings call.
Lockheed’s weapons, such the guided multiple launch rocket system and Javelin anti-tank missiles, made in conjunction with aerospace and defense firm RTX, have been used by Ukraine in its fight against Russia’s full-scale invasion.
However, because of software upgrade issues, the Pentagon is delaying final delivery acceptance for F-35 jets, management said, adding that the impact was about a $7 million per jet payment delay, which could be rectified by year-end or early 2024.
Lockheed anticipates delivering between 100 and 120 F-35s in 2023 compared to 141 in 2022.
The advanced jet is Lockheed’s largest program, having generated 27% of total consolidated net sales and 66% of aeronautics net sales in 2022.
Quarterly sales at Lockheed’s aeronautics unit, its largest, rose 17.3% from a year earlier to $6.88 billion. Last year’s second quarter was hit by the end of some federal funding and supply chain constraints stemming from the pandemic.
The world’s largest defense contractor now expects profit to be between $27 and $27.20 per share in 2023, compared with the previous guidance of $26.60 to $26.90 per share.
It expects full-year net sales to be between $66.25 billion and $66.75 billion, up from its earlier forecast of $65 billion to $66 billion.
Bethesda, Maryland-based Lockheed posted a net income of $6.63 per share for the second quarter, above Wall Street estimates of $6.45 per share, according to Refinitiv data. On an adjusted basis, profit was $6.73 per share.
Quarterly net sales rose 8.1% to $16.69 billion, beating expectations of $15.92 billion.
