Lockheed Martin raises full-year outlook after profit beat

(Reuters) - U.S. weapons maker Lockheed Martin LMT.N reported a better-than-expected third-quarter profit, helped by higher sales in its aeronautics unit which makes the F-35 fighter jet, and raised its full-year earnings forecast.

FILE PHOTO: Lockheed Martin's logo is seen during Japan Aerospace 2016 air show in Tokyo, Japan, October 12, 2016. REUTERS/Kim Kyung-Hoon

The U.S. defense sector has fared better compared with other industries amid a slump in demand due to the coronavirus pandemic, as the government has continued to purchase weapons while also providing support to defense contractors to pay the salaries of highly skilled workers.

Lockheed said deliveries of F-35 jets rose to 31 aircraft in the quarter ended Sept. 27, from 28 a year earlier.

On an earnings conference call with analysts, management said the company plans to deliver 120 to 125 F-35s in 2020.

Earlier in the year, Lockheed warned of a delay in jet deliveries due to a parts shortage as the coronavirus hampered production across the supply chain. Before the global pandemic hit, Lockheed forecast about 140 jet deliveries this year.

The company now expects 2020 earnings per share of about $24.45, compared with its previous forecast of between $23.75 and $24.05 per share.

It raised its full-year net sales outlook to $65.25 billion, from $63.5 billion to $65 billion previously.

Lockheed forecast sales in 2021 to increase 3% to at least $67 billion with similar profit margins as it recovers from the impact of the pandemic.

Shares were off by 1.6% during midday trading at $377.60 per share due to the conservative outlook.

The Bethesda, Maryland-based company said it assumed the corporate rate would stay at 21%, something U.S. presidential candidate Joe Biden has said he would change if elected. Currently, Lockheed pays taxes at a 14.7% rate.

Net earnings from continuing operations rose to $1.75 billion, or $6.25 per share, in the quarter, from $1.61 billion, or $5.66 per share, a year earlier.

Analysts on average expected Lockheed to earn $6.09 per share, according to IBES data from Refinitiv.

Reporting by Ankit Ajmera in Bengaluru and Mike Stone in Washington; Editing by Krishna Chandra Eluri and Bernadette Baum