U.S. defense giant Lockheed Martin on Monday, April 23 reported over $14 billion in sales for the first quarter of 2019, increasing its financial guidance across the board for the year.
The $14.3 billion in sales posted is an increase from $11.6 billion in the first quarter of 2018. Net earnings were up at $1.7 billion compared to $1.2 billion last year, and cash from operations increased by over a billion dollars to $1.7 billion from $632 million, driven by higher volume.
“The corporation had strong performance in the first quarter which has allowed us to increase our full year financial guidance for sales, profit, earnings per share and cash,” Lockheed Martin CEO Marillyn Hewson said.
“Our differentiated portfolio and record backlog position us well for continued growth, and we remain focused on delivering innovative technologies and solutions for our customers, and long-term value creation for stockholders.”
The company adjusted its 2019 financial outlook to $56.75 billion to $58.25 billion in net sales, with $6.1 billion to $6.25 billion in operating profit, up from $55.750 to $57,250 billion and $6 billion to $6.15 billion respectively. Earnings per share were increased to$20.05 to $20.35 from $19.15 to $19.45.
Net sales in the aeronautics division were $5.584 billion, a 27% increase from $4.398 billion for the same period in 2018. Operating profit increased to $585 million from $474 million last year.
The increase was driven primarily by $910 million in net sales for the F-35 program, about $100 million of classified development activities due to higher volume, and $70 million for the F-22 program, the company said.
The F-35 program also drove operating profits up 23 percent to $585 million, with approximately $105 million in the program due to increased volume and hire risk retirements on production and sustainment programs.
Missiles and Fire Control
Missiles and Fire Control net sales increased 40% for the quarter to $2.35 billion, attributable primarily to $295 million in sales for tactical and strike missile programs – primarily precision fires, classified programs and new hypersonic missile programs – $220 million in integrated missile defense programs – mostly primarily Terminal High Altitude Area Defense (THAAD) and Patriot Advanced Capability-3 (PAC-3) – and $140 million in increased volume sales of the Apache and Apache and Special Operations Forces Global Logistics Support Services programs.
The segment’s operating profit increased 60% to $417 million, including approximately increases of $75 million for integrated air and missile defense programs (primarily PAC-3 and THAAD), and about $55 million for tactical and strike missiles programs due to higher risk retirements and higher volume, Lockheed said.
Rotary and Mission Systems
The Rotary and Mission Systems segment saw a 17% growth in net sales to $3.762 billion, primarily driven by $295 million in sales in the integrated warfare systems and sensors (IWSS) programs due to higher volume, and about $170 million in Sikorsky helicopter programs due to higher volume.
Operating profit for the segment increased 22% to $379 million including a $30 million increase for IWSS programs, $15 million for Sikorsky helicopter programs, and a $15 million increase for C6ISR (command, control, communications, computers, cyber, combat systems, intelligence, surveillance, and reconnaissance) programs.
Net sales in the Space segment were $2.64 billion, up 13% from the same period in 2018, primarily due to $260 million in net sales for government satellite programs and $50 million for the Orion program.
The segment’s operating profit increased 27% to $334 million, with operating profit up approximately $65 million for government satellite programs and about $15 million for the Orion program due to higher risk retirements and higher volume. These increases were partially offset by a decrease of approximately $20 million due to lower equity earnings for ULA.