Lockheed Martin reports rare profit miss as pandemic hits F-35 deliveries


Lockheed Martin Corp on Tuesday missed profit estimates for the first time in the last eight quarters as the COVID-19 pandemic disrupted deliveries of the US weapons maker’s F-35 jets and caused supplier delays.

Shares of the company were down about 2.3% after it said fourth-quarter deliveries of its F-35 jets fell to 42 from 51 a year earlier.

Progressive Democrats in Congress have called for cuts in military spending amid the global health crisis, although analysts have said sudden changes are unlikely in an industry that has supported countless jobs during the recession.

Analysts, however, were optimistic about Lockheed’s prospects, citing the company’s strong balance sheet and demand for its offerings.

Lockheed’s move to raise its full-year cash from operations outlook to at least $8.30 billion from a prior $8.1 billion, along with a robust backlog, shows the defense sector remains a very resilient business, an analyst from Vertical Research Partners said.

Bethesda, Maryland-based Lockheed signed deals with United Arab Emirates, Japan and Taiwan in the last quarter, while Israel said earlier this month it was looking to expand its squadron of stealth F-35 warplanes.

“The Missiles business remained solid, aided by global defense spending,” Jeff Windau, an analyst at Edward Jones, said in an email. Lockheed’s missiles and fire control unit, which makes missile defenses like the Terminal High Altitude Area Defense (THAAD) saw fourth-quarter sales increase $97 million, or four percent over the same period a year earlier despite headwinds from the ongoing pandemic.

Lockheed now expects 2021 revenue between $67.10 billion to $68.50 billion, in line with analysts’ expectation of revenue of about $68.04 billion, according to IBES data from Refinitiv.

Full-year earnings for 2021 are expected to be in the range of $26.00 to $26.30 per share, above analysts’ average expectation of $26.13 per share.

Net earnings rose to $1.79 billion, or $6.38 per share, in the fourth quarter ended 31 December, from $1.5 billion, or $5.29 per share, a year earlier.

Analysts on average had expected net earnings of $6.41 per share.

Net sales rose 7.3% to $17.03 billion, above estimates of $16.92 billion.