Lockheed Martin profit beats, but company trims sales outlook on virus hit

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FILE PHOTO: A sign at the new Lockheed Martin Manufacturing Centre of Excellence is seen at the company’s headquarters in Ampthill near Bedford, Britain June 9, 2016. REUTERS/Peter Nicholls

(Reuters) – Lockheed Martin (LMT.N) reported better-than-expected quarterly profit on Tuesday, helped by higher sales in its aeronautics business that makes the F-35 fighter jets, but lowered its 2020 sales outlook due to coronavirus-led supply chain delays.

The company said it now expects full-year sales in a range of $62.25 billion to $64.00 billion, down from $62.75 billion to $64.25 billion, forecast previously. Lockheed reaffirmed its 2020 earnings per share forecast of $23.80 – the mid point of the range.

The company said production and supply chain activities had slowed in its aeronautics business due to the COVID-19 pandemic, forcing it to trim its sales outlook.

However, the U.S. defense sector is expected to see much less COVID-19 disruption due to generally stable cash flows compared with industrial markets, according to analysts.

Stable demand along with the Pentagon increasing interim payments to defense contractors, and also paying them for sick time or quarantined employees are expected to buoy the defense industry as coronavirus hits the economy.

Shares of Lockheed rose 1% to $388 in premarket trading.

Net earnings rose to $1.72 billion, or $6.08 per share, in the first quarter ended March 29, from $1.70 billion, or $5.99 per share, a year earlier, beating analysts’ average estimate of $5.80 per share.

Revenue rose 9.2% to $15.65 billion, and topped analysts’ expectation of $15.08 billion.

Reporting by Ashwini Raj and Ankit Ajmera in Bengaluru; Editing by Vinay Dwivedi

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