Lockheed Martin scores $1.9B F-35 contract

The contract 'ensures F-35s are mission ready to meet warfighter needs'

Lockheed Martin has secured a $1.9 billion contract to support operations and sustainment of its global F-35 fleet. Shares were little changed following the news.

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The contract will help Lockheed with the fighter jet’s maintenance, training and engineering worldwide.

“The F-35 continues to deliver exceptional capabilities to the field, and this contract ensures F-35s are mission ready to meet warfighter needs," said Greg Ulmer, Lockheed Martin vice president and general manager of the F-35 program, in a statement.

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“In 2020, we will continue to optimize and advance the sustainment system,” he said, adding that the company is “confident F-35 sustainment costs will be equal to or less than legacy jets."

Lockheed said the contract will help to further reduce sustainment cost per aircraft, which has fallen by more than 35 percent since 2015. The defense contractor aims to reduce the F-35’s cost per flight hour to $25,000 by 2025.

Lockheed delivered 134 F-35s in 2019, up 47 percent from the prior year, according to a Lockheed press release from Dec. 30. The company expects to deliver 141 F-35 jets next year before increasing production each year until reaching its peak in 2023.

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In October, Lockheed announced it was lowering the price of the F-35A by 12.8 percent to $77.9 million. The company had received criticism from President Trump, who said the program’s cost was “out of control.”

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Lockheed is scheduled to report its fourth-quarter results on Jan. 28. Wall Street analysts surveyed by Refinitiv are expecting a profit of $1.4 billion, or an adjusted $5.01 a share, on revenue of $15.3 billion.

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Shares gained 48.7 percent in 2019, and were up 5.2 percent year-to-date.