Lockheed raises 2016 forecast as F-35, Sikorsky lift sales

Tue Apr 26, 2016 11:00am EDT
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By Ankit Ajmera

(Reuters) - Lockheed Martin Corp (LMT.N: Quote) raised its 2016 forecast as the Pentagon's No. 1 weapons supplier continues to gain from the F-35 fighter jet program and its acquisition of helicopter maker Sikorsky Aircraft.

Shares of Lockheed, which also reported higher-than-expected quarterly sales, were up as much as 2.2 percent in morning trading.

The results from the world's largest defense contractor, often seen as a bellwether for the U.S. defense sector, also pushed up shares of smaller rivals Raytheon Co (RTN.N: Quote) and Northrop Grumman Corp (NOC.N: Quote) by about 1 percent.

Revenue from Lockheed's aeronautics business increased 21 percent, led by the F-35 program. The aeronautics business is its biggest and accounts for 34 percent of total revenue.

The F-35 Joint Strike Fighter is the Pentagon's largest weapons program, and the government is expected to spend $391 billion in development and purchase of the jets.

Lockheed has been scrambling to lower costs and become more agile as it speeds up production of the fighter jets. The company plans to deliver 53 F-35 jets in 2016, up from 45 a year earlier.

Sales in the latest quarter also got a lift from the company's $9 billion acquisition of Sikorsky Aircraft last year.

Revenue from its mission systems and training (MST) business, which includes Sikorsky, rose 52 percent in the quarter.   Continued...

A Lockheed Martin F-35 Lightning II fighter jet is seen in its hanger at Patuxent River Naval Air Station in Maryland October 28, 2015.     REUTERS/Gary Cameron