Lockheed Martin raises full-year forecast on strong weapons demand

WASHINGTON: US weapons maker Lockheed Martin on Tuesday raised its annual profit and sales outlook on strong demand for military equipment stoked by ongoing geopolitical uncertainties.

Shares of the company rose around 1% in premarket trading.

Defense companies in the US have been successful in translating demand for air defense systems, missiles and other weapons into orders, triggered by the war in Ukraine and increasing tension in US-China relations.

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, Lockheed’s F-35 jets face delays in delivery to the Pentagon due to software upgrades, according to media reports.

The advanced jet is Lockheed’s largest program, after having generated 27% of total consolidated net sales and 66% of aeronautics’ net sales in 2022.

But Lockheed received a boost earlier this month after Israel, the first country outside the United States to acquire the F-35, approved the purchase of an additional 25 stealth fighter jets in a deal worth $3 billion.

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 an adjusted net income of $6.73 per share for the second quarter, compared with $6.32 per share a year earlier. Quarterly net sales rose 8.1% to $16.69 billion.