Lockheed Martin (NYSE: LMT) has lifted its goal of international revenue from an initial goal of 25 percent originally set in 2014 to 30 percent in future years past 2016 as the defense contractor is “on track to exceed” the former benchmark this year, CEO Marillyn Hewson told investors Tuesday.
Contributions from the company’s Sikorsky helicopter subsidiary and the divestiture of its services segment into Leidos Holdings (NYSE: LDOS), Hewson said in the company’s third quarter earnings call with analysts.
“Our biggest growth internationally is in the F-35… and backlog is 30-percent international today, ” Hewson said.
She also cited missile defense programs as opportunities overseas with many international customers showing interest in platforms such as the Terminal High Altitude Area Defense and MEADS system, the latter for NATO-aligned countries.
“We’ve seen a lot of demand expanding from missile defense in the Asia-Pacific and the Middle East as well as in Europe, ” Hewson said.
“We are seeing growing interest… in markets that we hadn’t been before like France and Germany, so we expect that we will continue to have a pull for international growth, ” she added.
GovCon Index-listed Lockheed’s earnings and revenue guidance for 2017 topped Wall Street analysts’ expectations and the company also exceeded the consensus forecast for third quarter sales in its statement released before markets opened Tuesday.
Chief Financial Officer Bruce Tanner told investors Lockheed and the Defense Department are “making progress” contract negotiations surrounding F-35 lots 9 and 10 but the company is concerned over not receiving payments to close out both batches.
The company continues to self-fund production in order to keep both lots on schedule and impacts on aeronautics segment margins are not immediate, he said.
“Near term margins are more affected by prior lot contracts. The greater impacts are in later years, ” Taner said.
Lockheed’s stock was up 7.09 percent — or $16.43 — as of 1:30 p.m. Eastern time to lead all gainers in both Executive Mosaic’s GovCon Index and the U.S. stock bellwether S&P 500 composite index.
That jump has also lifted the GovCon Index into positive territory despite a roughly 2-to-1 ratio of decliners over advancers.
Defense primes Boeing (NYSE: BA), General Dynamics (NYSE: GD) and Northrop Grumman (NYSE: NOC) report third quarter results Wednesday with Raytheon (NYSE: RTN) and L-3 Communications (NYSE: LLL) scheduled for Thursday.