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Lockheed Delivers More F-35 to Customers, Tops 2019 Target

Zacks Equity Research

Lockheed Martin Corporation LMT once again has kept its F-35 delivery commitments by delivering more jets to its happy customers.  Recently, the company delivered 134th F-35 aircraft for the year, exceeding the joint government and industry 2019  goal of 131 aircraft.  The 134th aircraft is a Short Takeoff and Vertical Landing model for the United States Marine Corps.

The company has met its annual delivery targets three years in a row and continues to increase production rates, improve efficiencies and reduce costs of production of F-35s.  Currently, a F-35A’s price is $77.9 million, meeting the $80 million goal a year earlier than expected.

Increasing F-35 Production

F-35 aircraft is the most lethal, survivable and connected fighter aircraft in the world, giving pilots advantage against any adversary and enabling them to execute their mission and come home safe.

Due to its capabilities F-35’s popularity is increasing not only in the United States but also in international partner nations of the United States. In 2019, deliveries included 81 F-35s for the United States, 30 for international partner nations and 23 for Foreign Military Sales customers.

This year’s delivery reflects a 2.3% increase from the original annual delivery commitment of 131 aircraft fixed by the company.  It also marks 47% increase from 2018 and 200% increase from 2016 levels. Lockheed aims to deliver 141 F-35s in 2020, which reflects a 5.2% improvement from 2019 levels.  This clearly shows the rising popularity of this aircraft, and the company is building up to hit peak production levels of F-35 in 2023.

F-35 Suppliers are Happy

Lockheed has to depend on its extensive supply chain to produce the high-quality F-35 aircraft. The company needs parts and components, which comes from 1,400 domestic suppliers in 45 states and Puerto Rico.   

Suppliers like Northrop Grumman Corporation NOC and Eaton Corporation ETN will be happy among others going into 2020, courtesy of the popularity of this F-35 program.  Eaton will find some comfort as its order book is going to get adversely impacted by Boeing Company’s BA decision to temporarily stop production of Boeing 737. Eaton supplied Stabilizer trim actuator for Boeing 737 model.

Price Performance

Lockheed’s stock has gained 49.7% in the past year compared with the industry’s growth of 24.4%.
 





Zacks Rank

Lockheed currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
 
Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
 
The Boeing Company (BA) : Free Stock Analysis Report
 
Eaton Corporation, PLC (ETN) : Free Stock Analysis Report
 
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