Lockheed Martin Sets Modest Sales Expectations as Pandemic Weighs on Spending
October 20 2020 - 7:41AM
Dow Jones News
By Doug Cameron
Lockheed Martin Corp. said it expects sales to rise about 3%
next year as the world's largest defense company provided a first
look at the impact of slowing military budget growth.
The company said Tuesday that it expects sales to be at or above
$67 billion in 2021 as it reported forecast-beating quarterly
earnings and boosted 2020 guidance following a rise in its order
backlog to a record $150 billion.
The defense industry has been one of the U.S. economy's
most-resilient sectors during the pandemic, with its designation as
an essential industry allowing plants to avoid shelter-in-place
orders. The Pentagon also has accelerated contract payments to help
the sector's smaller suppliers.
But the U.S. defense budget is forecast by analysts to grow in
the low single digits over the next several years, with a rising
federal deficit from spending to tackle the coronavirus pandemic
hitting investment in military spending.
Lockheed Martin's third-quarter profit rose to $1.7 billion,
from $1.6 billion a year earlier, and per-share earnings climbed to
$6.28 from $5.70, above the $6.09 consensus among analysts polled
by FactSet. Sales rose to $16.5 billion from $15.2 billion.
Lockheed Martin said its 2021 guidance assumed it was
compensated for pandemic-related costs, which analysts have
estimated to be around $2.5 billion.
Its shares rose about 0.25% in premarket trade.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
October 20, 2020 08:26 ET (12:26 GMT)
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