Lockheed Martin, the global aerospace and defence company, has reported strong Q1 2023 results with sales of $15.1bn and a segment operating profit of $1.7bn, representing a 16% growth from Q1 2022.
The company’s earnings have been driven by the growing threat of China in the South China Sea and Indo-Pacific, as well as Russia’s invasion of Ukraine, which is driving the US national defense strategy.
The F-35 program spearheaded the company’s earnings, receiving strong support from services. In February, Canada procured 88 F-35’s, with the delivery of F-35 engines resumed. The block 70 version of the F-35 aircraft was also delivered to Bahrain, with Jordan and Bulgaria set to receive the F-16 after the potential sale was approved in Q1, highlighting the elevated demand from allies and partners.
Lockheed Martin‘s total business segment operating margin was at 11.1%, a fall from the previous year of 11.5%. However, earnings per share increased from $6.44 to $6.61, a $0.17c increase.
Other orders that drove sales in Q1 2023 included Australia’s order of HIMARS and the order of 40 UH60M Blackhawks. The US Navy’s CPS order is set to be delivered by the mid-2020s, with the hypersonic missile defense system (HALO) also contracted.
While the aeronautics sales had a decrease of 2% in 2023, this has been blamed on lower F-35 production volume and a higher F-16 production volume.
Lockheed Martin’s missiles and fire control segment also saw sales decrease by 3%, with operating profits decreasing by 2%. Even with the procurement of 40 UH60M Blackhawks from Australia, rotary mission systems sales decreased by 1%, mainly due to lower volumes on Blackhawk but partly down to production issues.
Lockheed Martin views the Q1 2023 results as a solid start to the year and expects a return to growth in 2024 and beyond. Despite the challenges, Lockheed Martin is confident in its ability to meet the growing demand for its products and services as geopolitical tensions continue to rise.