This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (October 25, 2017).
Lockheed Martin said Tuesday that it expects sales to grow about 2% next year, driven heavily by its flagship fighter jet, as the weapons maker reported quarterly earnings that fell just shy of expectations.
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The world's largest defense contractor by revenue provided the first insight into industry trends for next year, while also leaving its 2017 guidance unchanged aside from a one-time gain from property sales.
Lockheed said its forecast for 2018 sales to grow by about $1 billion also reflects the coming adoption of new accounting standards that will depress sales by about 2%.
Revenue at the aeronautics unit, its largest, should show a percentage gain in the high single digits, Lockheed finance chief Bruce Tanner said. Higher sales of its F-35 Joint Strike Fighter to the Pentagon and foreign operators would help offset lower deliveries on other planes, including the F-16 combat jet and the giant C-5 transport plane.
Sales for the space unit that makes military and commercial satellites will likely slip next year, Mr. Tanner said.
Lockheed recently secured some high-profile, big-ticket overseas deals, including to provide Thaad missile defense systems to Saudi Arabia and more F-16 jets to Bahrain. Revenue from those deals will be slow to arrive, though, and likely have little impact on 2018 results.
The company also said a continuing budget stalemate in Washington could threaten its outlook. Pentagon spending for the fiscal year that began Oct. 1 has been constrained because Congress hasn't passed a new budget.
If that persists it could impact orders, Chief Executive Marillyn Hewson said. But she told analysts she was "pretty optimistic that it is not going to do that."
Lockheed reported a third-quarter profit of $939 million, down from a year-earlier profit of $2.4 billion that benefited from one-time gains. Per-share earnings fell to $3.24 from $7.93, 2 cents below the consensus among analysts polled by Thomson Reuters. Sales rose 5% to $12.2 billion.
Mr. Tanner said timing issues on payments for some weapons sales would be more than offset in the final three months of the year.
The company lifted its full-year sales guidance to a range of $50 billion to $51 billion, driven by a $200 million property gain, while leaving other key metrics unchanged.
Mr. Tanner said the company's backlog of orders also topped $100 billion for the first time.
Lockheed ended the day down 2.4% at $313.15. The stock is up more than 24% on the year.
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(END) Dow Jones Newswires
October 25, 2017 02:47 ET (06:47 GMT)