[ad_1]
(Reuters) – Lockheed Martin Corp (LMT.N), the Pentagon's top arms supplier, posted stronger-than-expected quarterly earnings growth on Tuesday, driven by increased production of its F-35 fighter jets and anticipated sales ahead of Wall Street estimates for next year.
An RAF F-35B Lockheed Martin fighter jet takes a taxi along a landing strip after landing at the Royal International Air Tattoo in Fairford, UK on July 8, 2016. REUTERS / Peter Nicholls / File Photo
The company, whose products figure prominently in the US $ 110 billion package of arms contracts with Saudi Arabia, announced by President Trump in May 2017, is forecasting sales of around 500 million dollars in the UK next year.
The death of Washington Post reporter Jamal Khashoggi has been criticized by Saudi Arabia. However, Lockheed hinted that if US arms sales declined, its earnings outlook for 2019 would not be affected.
The company said it was now forecasting a net business turnover of $ 53 billion in 2018, slightly above the average estimate of $ 52.6 billion from analysts. Lockheed increased its earnings guidance to $ 17.50, better than the estimates of $ 17.11 per share, according to Refinitiv data.
Lockheed predicted that sales in 2019 would increase by 5% to 6% from 2018, assuming that "key programs" such as the F-35 fighter, designed to avoid detection, continue to 39, be funded by the US government.
Chief Financial Officer, Bruce Tanner, said there was "not a huge dependency" on Saudi sales embedded in his forecasts for 2019 and 2020.
The sales outlook for 2019 would put sales in a range of $ 55.6 to $ 56.2 billion, a figure slightly higher than the average estimate of $ 55.4 billion.
Lockheed's tax rate dropped to 6.5% in the third quarter, thanks to a larger than usual $ 1.5 billion contribution to its pension plan, strengthening net income. In the third quarter of 2017, before the adoption of a corporate tax reduction in the United States, Lockheed posted a rate of 25.8%.
Net income reached $ 1.47 billion, or $ 5.14 per share, in the third quarter, compared to $ 963 million, or $ 3.32 per share, a year earlier. Net sales reached $ 14.31 billion, up from $ 12.34 billion a year ago.
Analysts expected an adjusted profit of 4.31 USD per share for a turnover of 13.07 billion USD, according to Refinitiv estimates. Lockheed's BPA was $ 5.14.
Joseph DeNardi, an analyst at Stifel, said in a note that Lockheed's F-35 stealth fighter program reported strong profit margins. F-35 production volume and maintenance payments increased during the quarter.
Margins were also strong in the Lockheed Rotary business unit and Mission Systems, which manufactures ships and helicopters. Operating profit increased by 40% over the same period last year, thanks in part to improved margins from sales of missile launch systems.
The company based in Bethesda, Maryland, said its order backlog reached $ 109 billion at the end of the quarter, up from $ 105 billion three months ago.
Lockheed shares fell 2.7% to $ 318.02, as the overall market slumped in part due to fears of a slowdown in corporate earnings growth in 2019.
Report by Mike Stone in Washington, DC; Edited by Jeffrey Benkoe and Bill Berkrot
Source link
