Lockheed Martin’s push to meet its most ambitious target yet for production of the F-35 Joint Strike Fighter helped drive profit 22 percent higher in the three months through June.
The defense contractor, which expects to deliver 91 of the planes this year after boosting deliveries to 66 in 2017, reported earnings of $4.05 a share in the second quarter. That topped the $3.92 average estimate from analysts surveyed by FactSet.
Sales in the aeronautics division, which builds the F-35, rose 8 percent, to $399 million, with the lion’s share coming from higher deliveries of the aircraft. Companywide, net income rose to $1.16 billion on revenue of $13.4 billion.
“Our organization continues to deliver innovative capability to our customers,” Chief Executive Officer Marillyn Hewson said on an earnings call, citing enthusiasm from both the U.S. military and international customers for the “transformational” F-35.
The Bethesda, Md.-based company expects further benefits as Congress boosts the military’s budget for products like the C-130J cargo plane, BlackHawk helicopters and littoral combat ships that can maneuver close to coastlines, Hewson said.
Current spending proposals also call for additional purchases of the F-35, and Lockheed is adding 400 workers in Fort Worth, Texas, to boost production. It has already made good on an earlier promise to President Trump to increase the aircraft’s workforce by 1,800.
Trump, meanwhile, bragged to a veterans group the same day that the military was ordering more of the jets and praised their stealth technology, which makes them hard for enemy systems — such as radar and infrared sensors — to detect.
“This is an incredible plane,” the president said. “When I talk to even people from the other side, they’re trying to order our plane. They like the fact that you can’t see it. I say, ‘How would it do in battle with your plane?’ They say, ‘Well, we have one problem: We can’t see your plane.’ That’s a big problem.”
Lockheed trumped rival defense contractor Boeing for the right to develop the aircraft in 2001, the first year of George W. Bush’s presidency. The supersonic plane is 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. The most expensive warplane in U.S. history, it’s expected to cost more than $406 billion.
Its development 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.
Lockheed said Monday that it had cut the cost of building each F-35 by about 60 percent since the first lot was produced. It’s on track to reduce the expense to $80 million by 2020, which would be equal to or less than legacy jets like the F/A-18, according to the company.
Lockheed rose 1.3 percent to $322.57 in New York trading on Tuesday morning, stretching gains over the past year to 11 percent.
