Lockheed Martin expects sales to climb more than 6 percent this year amid a swelling order backlog for the F-35 fighter jet, the most expensive weapons program in U.S. history
The Bethesda, Md.-based defense contractor said Tuesday it’s targeting $57 billion in revenue this year after sales growth in 2018 fueled by increased U.S. military spending. An F-35 order late in the year added 250 planes to the fighter’s outstanding orders, pushing the total to 400, CEO Marillyn Hewson told investors on an earnings call. That “exceeds the total F-35 deliveries made to date,” she said, “a clear sign of the program’s momentum.”
The largest U.S. defense contractor, Lockheed trumped rival Boeing for the right to develop the F-35 in 2001, the first year of George W. Bush’s presidency. The stealthy, supersonic plane was designed to replace aging fighter jets such as the Air Force’s F-16s and the Navy’s F/A-18s while deftly handling both precision air-to-ground strikes and mid-air combat with other jets.
Development of the aircraft, which already carries an expected price tag of more than $406 billion, hasn’t always run smoothly, however. Members of Congress have criticized rising costs and delays in the program, and the Defense Department temporarily blocked deliveries of the stealth fighter before resolving a dispute over repairs in May.
The concern in that case was Lockheed’s failure to apply a corrosion-preventing primer to fastener holes on the aircraft, the government said. The military office overseeing the program, along with U.S. armed forces and overseas allies, set up a corrective-action plan to make necessary repairs while minimizing the effect on defense operations.
The contractor said in 2018 that it would add 400 workers to boost production of the F-35 after making good on an earlier promise to President Trump to increase the workforce by 1,800. Lockheed says it has cut the cost of building each F-35 by about 60 percent since the first lot was produced and is on track to reduce the expense to $80 million by 2020, which would be equal to or less than legacy jets such as the F/A-18.
The company’s stock rose 1.3 percent to $291.72 in New York trading on Tuesday, driving its gains so far this year to 11 percent. Fourth-quarter profit of $1.25 billion, or $4.39 a share, compared with a loss of $744 million a year earlier.
