Lockheed Martin executives claimed a "solid" first quarter consistent with the company's 2023 expectations, and applauded the Defense Department's fiscal year 2024 budget request that looks to invest in F-35 procurement and several of Lockheed's missile systems.
“We remain on track to meet our financial expectations for the full year and return to growth in 2024 as we laid out in January,” CEO James Taiclet said, listing $15.1 billion in quarterly sales and $1.7 billion in net earnings -- figures almost identical to those recorded in the first quarter of 2022.
During the company’s final quarterly earnings call of 2022, executives predicted limited revenue growth in 2023 resulting from supply chain issues and a temporarily reduced delivery schedule for the company’s Rotary and Mission Systems sector, but said these headwinds will slacken in 2024.
Looking to the Pentagon’s FY-24 budget, Taiclet said he is encouraged by strong demand for the F-35 Joint Strike Fighter, with 83 of the aircraft included in Air Force, Navy and Marine Corps procurement plans.
Taiclet acknowledged some of this year’s F-35 deliveries will be delayed due to “software maturation related to technology refresh three or TR-3, and hardware delivery time.”
He said these delays will have little to no impact on the company’s revenue.
The Lockheed CEO also highlighted international demand for the F-35, pointing to a January agreement to produce 88 F-35 Lightning II fighter jets for Canada, with deliveries beginning in 2026. With this award, Canada joins the growing list of F-35 customers along with Germany, Belgium, Finland and Poland.
Lockheed’s Chief Financial Officer Jay Malave said the company sees international demand for the F-35 and other platforms including the F-16 fighter as a significant contributor to business growth over the next five years.
Lockheed executives also highlighted growing domestic interest in various hypersonic weapons, starting with a $1.1 billion February contract award to outfit the Navy’s Zumwalt-class ships with Conventional Prompt Strike -- a long-range missile system that will be the Navy’s first sea-based hypersonic capability.
Taiclet also underscored increased demand for the Joint Air-to-Surface Standoff Missile and Long-Range Anti-Ship Missile (JASM and LRASM), with the company preparing to rapidly scale up production of the two systems as it anticipates future block buy contracts.
Taiclet underscored Lockheed’s completion of a second flight test of its Hypersonic Air-Breathing Weapon Concept and touted the company’s selection to develop a carrier-based Hypersonic Air Launched Offensive Anti-Surface (HALO) weapon for the Navy.
The company has also continued testing its Air-Launched Rapid Response Weapon (ARRW) at hypersonic speeds to achieve technical maturation of the missile’s glide body, although the Air Force has indicated it does not plan to procure the system.
Lockheed’s supply chain is largely able to keep up with the company’s needs, Taiclet said, but there are some remaining challenges and the company doesn't expect to see any significant change before the end of the year.