By Pratyush Thakur and Mike Stone
(Reuters) – U.S. defense group Lockheed Martin on Tuesday raised its annual sales target for the first time this year, following an unexpected recovery in deliveries of its F-35 jets after the Pentagon began accepting the jets last week.
The United States has resumed deliveries of the F-35 after a months-long pause due to delays in its software upgrade. Lockheed upgraded the planes under the Technology Refresh 3, or TR-3, program, which gives the F-35 better displays and processing power.
The resumption of deliveries includes an incomplete software upgrade, and the Pentagon will withhold some payments, the details of which are unknown, until the remaining improvements are completed.
Lockheed’s F-35 is the world’s largest defense program, contributing about 30 percent of the company’s revenue.
“The F-35 remains a top priority, and we recently delivered the first TR-3 configured aircraft to the customer and are planning deliveries through 2024 to meet our planned range of 75 to 110 F-35s,” said CEO Jim Taiclet.
The TR-3 involves both hardware and software upgrades and is seen as a pillar of a broader upgrade of the stealth jet known as Block 4. The upgrades “are critical steps to ensuring the F-35 remains the world’s most advanced combat aircraft and the key air vehicle node in the DoD’s common all-domain architecture,” Taiclet said.
Lockheed does not expect the full technology update package to be ready for several months, however.
The group expects its 2024 sales to be between $70.5 billion and $71.5 billion, compared with a previous forecast of $68.5 billion to $70 billion.
The company also received an additional $95 billion in funding, which includes aid to Ukraine and Israel, approved by Congress.
The fighting in Ukraine and Israel has consumed large quantities of munitions, including Patriot air defense interceptors made by Lockheed, used to shoot down incoming hostile missiles.
Lockheed reported net income of $6.85 per share for the second quarter, up from $6.63 per share a year earlier.
Total quarterly sales increased 8.5% to $18.12 billion.
(Reporting by Pratyush Thakur in Bangalore; Editing by Shilpi Majumdar)
