Lockheed Martin is boosting its 2018 profit target despite the government’s decision to halt deliveries of the F-35 fighter, the largest U.S. weapons program, over a contract issue.
The Bethesda, Md.-based aerospace company expects segment earnings of $5.32 billion to $5.47 billion, an increase of 2.2 percent, following sales growth of 7 percent in its aeronautics business driven by the high-tech jet.
Lockheed executives, who characterized the military’s move as a “temporary suspension,” said the firm is maintaining current production levels and still expects to deliver more than 90 F-35 jets this year.
The Pentagon office overseeing the program didn’t immediately return a message seeking comment.
Earlier this month, the jet completed the system-design phase of its flight testing, increasing the total number of test runs since 2007 to 9,200, spanning more than 17,000 flight hours. CEO Marillyn Hewson described it as the “most comprehensive, complex and rigorous developmental flight test program in aviation history.”
Lockheed Martin trumped rival defense contractor Boeing for the right to develop the aircraft 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.
As of March, the Defense Department said it expected to spend $406.1 billion on developing and acquiring the air fighter. Operating and maintenance costs for the next six decades may top $1 trillion, according to the Government Accountability Office, the investigative arm of Congress.
Lockheed Martin fell 6.7 percent to $334.56 in New York trading on Tuesday afternoon. The company’s net income climbed 47 percent to $1.16 billion, or $4.02 a share, in the three months through March, topping the $3.39 average estimate from analysts surveyed by FactSet. Revenue rose 3.8 percent to $11.6 billion.
