Lockheed Martin said 2019 revenue may climb even higher than it projected three months ago after sales of the F-35 fighter jet, the most expensive weapons program in U.S. history, topped $910 million.
Customer purchases of the fighter during the first three months of the year drove growth of 27 percent in aeronautics, Bethesda, Md.-based Lockheed’s biggest business, which posted sales of $5.58 billion, the company said Tuesday.
Deliveries of the F-35 nearly doubled to 26 compared with the same period in 2018, CEO Marillyn Hewson told investors on an earnings call. The Navy deemed its variant of the plane combat-ready in February, she said, and can now prepare to deploy the aircraft aboard the USS Carl Vinson, marking the first time in over half a century that the service uses the same family of jets flown by the Marine Corps and the Air Force.
“We are continuing to see increased opportunities for the F-35,” she added. The Pentagon “has been very clear” about sticking to a target of buying 2,456 of the planes, Hewson said, though purchases may vary from year to year “as they look at what their overall needs are relative to the budgets that they have to work with.”
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 midair 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 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.
Companywide, revenue rose 23 percent to $14.3 billion in the first quarter, Lockheed said, and it now expects full-year sales of as much as $58.3 billion, an increase of 1.7 percent.
The company’s shares rose 6.6 percent to $336.18 in New York trading on Tuesday.
