Lockheed Martin on Tuesday reported a strong close to 2019 with double-digit sales and profit growth, and the company expects further gains in 2020.
The company’s net income in the fourth quarter jumped 15% to $1.5 billion, or $5.29 per share, from $1.3 billion, or $4.39 a share, a year ago. That was comfortably above consensus estimates by $0.26 per share. Sales for the year increased 11% to a record $59.8 billion from $53.8 billion in 2018, while 2019 net income soared 24% to $6.2 billion, or $21.95 a share, from $5 billion, or $17.59 a share. Per-share earnings for 2019 were also a record, the Bethesda, Md.-based aerospace titan reported.
All four of Lockheed’s operating segments reported higher sales for the 2019 year, and its fourth quarter, including the two with much of the company’s direct nuclear weapons work: Missiles and Fire Control, and Space.
Sales at Missiles and Fire Control were up 20% on the year to more than $10 billion, and rose 14% to almost $2.8 billion for the quarter, due in part to work on hypersonic technologies. Space sales rose 11% to nearly $11 billion for the year, and increased 14% for the quarter to about $2.8 billion.
Missiles and Fire Control’s operating profit for the year rose more than 15% from 2018, to just under $1.5 billion, though quarterly operating profit ticked down about 7.5% to $348 million as the government spent less on certain Air Force sensor programs and the Javelin anti-tank missile programs, the company reported. The segment includes Lockheed Martin’s technology development for the Long-Range Standoff (LRSO) Weapon cruise missile: the nuclear-tipped successor to the AGM-86 air-launched cruise missile that will carry W80-4 warheads provided by the National Nuclear Security Administration.
Space operating profit was nearly $1.2 billion for the year, up 13%, and roughly $260 million for the quarter, up 16%, Lockheed reported. Driving the gains were the Advanced Extremely High Frequency, Next Generation Overhead Persistent Infrared missile warning, and GPS III satellite programs, plus fleet ballistic missile programs. The latter is where Lockheed bookkeeps its worklmaintaining the Titan II D5 submarine-launched ballistic missiles that carry W76-1, W76-2, and W88 nuclear warheads.
Lockheed is also a partner on the Northrop Grumman-led team that now appears locked to win the contract to build the Air Force’s next-generation intercontinental ballistic missile, the Ground-Based Strategic Deterrent. Boeing, Northrop’s rival to prime the new sil0-based ballistic contract, could still slow the program with a protest.
Lockheed Martin expects 2020 sales between $62.8 billion and $64.3 billion, up from roughly $62 billion offered in October during the third quarter earnings call, with earnings per share between $23.65 and $23.95. Growth is expected in each of the company’s segments.
Lockheed Martin tallied $5 billion in F-35 orders in the fourth quarter as it finalized Lot 12 and 13 production contracts and added 112 aircraft to the backlog, lifting the backlog to 374 F-35s. The Lot 14 contract is expected to be finalized early this year, she said.
F-35 eventually will carry B61-12 nuclear gravity bombs: the designation by which the oldest deployed U.S. nuclear weapon will be known when the National Nuclear Security Administration finishes a life-extension program sometime in the next decade that will homogenize four existing iterations.
Congress appropriated about $100 million for research and development of F-35 Block 4 technical capabilities, which will include the ability to internally carry a pair of B61 bombs.
The F-35 has had a famously bumpy development and caught flack this week after Bloomberg reported that an annual Pentagon audit found that the fighter’s 25 millimeter guns are inaccurate.