Lockheed Martin’s sales target has been raised for the entire year due to strong demand for fighter jets and its missiles, which helped the performance in the second quarter exceed expectations.
The US Defence Group said that it expects revenues to reach $71.5bn in 2018, up from $70bn and above Wall Street’s estimates.
Lockheed reported that strong demand for their F-35 and F-16 jet fighters contributed to a boost in second-quarter revenue of close to 9 percent compared to the same period last year, to $18.1bn. Stocks of the company rose 4.5 percent in New York.
Frank St John said that the company expects the strong demand for their products will continue following the conflict in Ukraine.
Lockheed weapons donated by the US government played a key role on the Ukrainian battlefield. These included the guided multiple launch rocket systems (GMLRS), Javelin and PAC-3 missiles that are part of Patriot missile defence.
He said that the conflict had “raised a general consciousness of the need for more deterrence and resources applied to defense “.
He said: “I think that, independent of Ukraine, there will be strong deterrence demands across Europe, and certainly in South-East Asia, as well as around the globe.”
St John downplayed some concerns from the business community that a new US administration after the presidential election in November could have an impact on the industry.
He said: “Our history shows that we have been able establish good relations with both parties, and every time a new administration comes in there are always efforts to redouble our efforts to build these relationships.”
He added, “We do not anticipate any changes to what we are doing or the way we are doing it.” “Our focus has always been on providing deterrence capabilities, security capabilities which are fundamental to the freedoms and government form that we have.”
Lockheed resumed last week deliveries of the F-35 fighter plane after shipments had been halted due to delayed upgrades designed to give better displays and processing powers. The company continued to produce at maximum capacity throughout the delivery pause and built up an inventory.
The company won’t slow down its production. St John stated that it would take “about three or four quarters” to get through the backlog of jets.
Robert Stallard of Vertical Research Partners said: “After two years of grappling with a clogged-up supply chain we see these Lockheed Results as a clear indication that the defence industry has come out the other side.”
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