Lockheed Martin, one of two Pentagon contractors developing a new cruise missile intended to carry the W80 nuclear warhead, this week reported better than 25-percent year-over-year earnings growth for the second quarter of 2018.
Net income for the quarter ended June 24 rose 26 percent to $1.2 billion, or $4.05 a share, from $955 million, or $3.28 a share, in 2017. Lockheed cited higher sales, lower taxes, a pension benefit, and improved operating performance. The aerospace prime beat the street by 0.13 per share, despite an after-tax charge of $76 million, or $0.26 per share, on severance and restructuring expenses.
Sales increased nearly 7 percent to $13.4 billion from $12.6 billion a year ago. Total backlog at the end of the second quarter stood at $105 billion, down nearly $500 million since the end of 2017.
Lockheed Martin and Raytheon are maturing designs for the future Long-Range Standoff (LRSO) weapon under four-year Pentagon contracts awarded in 2017 and worth about $900 million each. The next-generation, air-launched, nuclear-capable cruise missile will one day carry the W80 warhead now being refurbished by the Department of Energy’s National Nuclear Security Administration (NNSA).
The NNSA says it can complete the first deployable W80-4 by fiscal 2025. The Lawrence Livermore National Laboratory is the lead designer for the warhead, which would initially be carried on LRSO aboard the Air Force’s Boeing-designed B-52 Stratofortress bomber.
Lockheed’s Missiles and Fire Control segment was one of the quarter’s rock stars, posting higher sales on the strength of tactical missile programs including LRSO, according to the company’s latest 10-Q filing with the U.S. Securities and Exchange Commission. Quarterly operating profit for the segment rose about 10 percent to some $280 million, as sales climbed more than 15 percent to more than $2 billion.
