The two largest U.S. protection contractors mentioned ongoing provide chain challenges are hampering efforts to ship on record weapons orders, pushed by the battle in Ukraine and tackling China’s army growth.
Lockheed Martin Corp. mentioned employee shortages have hampered manufacturing, whereas the Pentagon has sped up purchases of weapons headed to Ukraine. Raytheon Technologies Corp. mentioned it could be the tip of the 12 months or past earlier than manufacturing of some supplies returns to prepandemic ranges.
The two companies have been the largest beneficiaries of the $27 billion in army tools dedicated by the U.S. to Ukraine, when it comes to contracts awarded, although to date solely $6.6 billion is beneath contract to business.
Executives have cited shortages of labor and elements equivalent to chips and rocket motors, in addition to the necessity for extra certainty that orders will observe if companies make investments extra to spice up capability.
OMNIBUS CONTAINS $11.9B FOR PENTAGON TO REPLENISH WEAPON SYSTEMS SENT TO UKRAINE
Defense gross sales at each companies fell final 12 months in contrast with 2021, in response to quarterly outcomes launched Tuesday.
“We’ve obtained the orders, we’ve obtained the capability,” Raytheon Chief Executive Greg Hayes mentioned on an investor name. “We simply have to convey the supplies in.”
Jay Malave, Lockheed Martin’s chief monetary officer, mentioned contracts are being awarded at a quicker clip. “The DOD has accelerated their velocity to get them the place they wish to be,” he mentioned.
Lockheed Martin, which also makes F-35 combat jets, has mentioned it could take two years to double manufacturing of Javelin antitank missiles, co-produced with Raytheon, and Himars rocket launchers, each being extensively utilized by Ukraine in its conflict with Russia.
Mr. Malave mentioned suppliers stepped as much as a quicker manufacturing tempo within the last quarter of final 12 months, serving to enhance Lockheed Martin’s quarterly gross sales to $19 billion, about 3% above the corporate’s inner planning.
BLOCKADE OF TAIWAN BY CHINA COULD COST WORLD ECONOMY OVER $2 TRILLION, REPORT FINDS
“The entire worth chain has been capable of function at a better degree,” he mentioned, although metrics equivalent to on-time deliveries didn’t enhance a lot within the fourth quarter and labor shortages proceed to pinch manufacturing.
|LMT||LOCKHEED MARTIN CORP.||449.32||+8.06||+1.83%|
|RTX||RAYTHEON TECHNOLOGIES CORP.||99.465||+3.25||+3.38%|
Lockheed Martin reported a internet revenue of $1.91 billion for the quarter ended Dec. 31, in contrast with $2.05 billion a 12 months earlier. Per-share revenue slipped to $7.40 from $7.47, simply in need of the consensus forecast of analysts polled by FactSet. Its order backlog topped $150 billion in 2022.
Lockheed Martin left its current steering for flat gross sales in 2023 largely unchanged, forecasting a return to development in 2024 when the provision chain improves.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Raytheon reported revenue of $1.4 billion for the quarter ended Dec. 31, in contrast with $685 million a 12 months earlier. Per-share revenue rose to 96 cents from 46 cents, and gross sales climbed virtually 6% within the quarter to $18.1 billion, lifted by industrial aerospace engines and components.