(Reuters) - Lockheed Martin Corp (LMT.N) reported a better-than-expected quarterly profit on Tuesday and raised its 2019 profit forecast for the second time in three months, helped by increased demand for its stealth F-35 combat jets and missiles.
The company’s shares rose 2.1% in pre-market trading. Defense stocks have rallied this year following Washington’s hike in defense spending in the budget proposed late last year.
Lockheed’s better-than-expected results come at a time the United States has decided to remove Turkey from the advanced F-35 jet program, following its purchase of a Russian missile defense system.
Turkey had been a part of the manufacturing process for the advanced fighter jets, supplying hundreds of items including parts for cockpit display systems and landing gear.
“I don’t anticipate any material, longer-term impact from Turkey’s participation in the F-35 program,” said analyst Joseph DeNardi at Stifel.
“While it may create some nearer-term challenges related to the program’s supply chain, there seems to be very strong international demand from new foreign customers that could backfill Turkey’s orders,” DeNardi said.
(For a graphic on 'Lockheed Martin has outperformed peers so far this year' click tmsnrt.rs/32N3nQi)
Lockheed’s missiles and fire control unit, which makes missile defenses like the Terminal High Altitude Area Defense (THAAD), was one of its best-performing units where sales grew 15.6% to $2.41 billion during the reported quarter.
The THAAD system is designed to shoot down short-, medium- and intermediate-range ballistic missiles.
The Pentagon’s No.1 weapons supplier now expects full-year profit to range between $20.85 and $21.15 per share and raised sales
