U.S. weapons maker Lockheed Martin LMT-N beat Wall Street expectations for first-quarter sales and profit on Tuesday, as simmering geopolitical tensions prompted some countries to boost their defence spending, driving demand for new weapons.
Sales in Lockheed’s missiles and fire control unit jumped 25.3% to nearly $3 billion, boosted by strong demand for high mobility artillery rocket system (HIMARS) and guided multiple launch rocket system (GMLRS), key weapons used by Ukraine in its conflict with Russia.
“We saw strong labour and material throughput, indicative of an improving supply chain,” Lockheed CFO Jay Malave said on the post-earnings conference call on Tuesday.
Sales in the company’s aeronautics business, its biggest unit and which makes the F-35 fighter jets, rose 9.2% to $6.85 billion.
“These first-quarter results reinforce our confidence in our ability to achieve the full-year financial expectations we set in January,” CEO Jim Taiclet said in a statement.
It had forecast full-year net sales of $68.5 billion to $70 billion and profit of $25.65 to $26.35 per share.
It started the year with a quarterly profit of $6.39 per share, well above analysts’ expectations of $5.83 per share, according to LSEG data.
The delay in resuming deliveries of its marquee F-35 jet to Pentagon due to the TR-3 software upgrade has left Lockheed with fighter jets in its inventories.
TR-3 refers to a series of enhancements to the F-35, encompassing improved displays, increased computer memory and enhanced processing capabilities.
“The test results to date support our expected timeline of delivering the first TR-3 combat training-capable aircraft in the third quarter and then transition to a fully combat-capable aircraft in 2025,” Taiclet said.
Lockheed’s first-quarter net sales rose 14% to $17.2 billion, also beating analysts’ expectations of $16.02 billion.
Last week, the U.S. Missile Defense Agency said Lockheed won a $17 billion contract to develop the next generation of interceptors to defend the United States against an intercontinental ballistic missile attack.