LMT - Earnings call transcript Q1 2018 | Lockheed Martin Corporation

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Lockheed Martin First Quarter 2018 Earnings Results Conference Call. At this time, all the participant lines are in a listen-only mode. There will be an opportunity for your questions, instructions will be given at that time. [Operator Instructions] As a reminder, today's call is being recorded. I'll turn the conference now to Mr. of President Vice Gardner, Investor Relations. Greg ahead, go sir. Please

Greg Gardner

I Thank quarter welcome to and XXXX morning. you, good would everyone conference like call. John, earnings to our first

President Actual and are Joining results are factors in description our Tanner, law. statements. considered differ filings Harbor historical are materially Please differ today's President projected Officer. and provisions securities of that Hewson, of the a call those today may the Financial Vice Executive to made call forward-looking forward-looking results see Chief the materially made from me our federal and statements the on for cause Executive Safe Chairman, some of today's our pursuant from statements. may fact the Statements and and forward-looking those press Bruce that Chief Officer; release not Marillyn to SEC in in are

today during follow comments. to We our the call our With our the plan and click and link website on Investor our would I that, Marillyn. supplement charts. we turn over to on Relations address have to charts Please at to call www.lockheedmartin.com view that to the website posted like access the

Marillyn Hewson

our morning, call Good welcome everyone Greg. and Thanks, today. to

this our team. I’m to performance as us on products and critical level solutions to are accomplishments customers and returning high while stockholders and extraordinarily our creation. proud take Martin we our some would thank growth deliver our continue to We focus from I their continues The to the organization as key our value for corporation of value across you long-term Lockheed to of and to opportunity pleased first have to joining like operational review team we quarter results our Company. also

As today’s financially. quarter, a and details, strong release very operationally had we

a have us share. the financial our our in-depth of to the business full-year XXXX outlook pleased our very that across operating results call. the enabled profit performance remainder and expectations per strong on little for earnings year-to-date for later sales, I’m review all will We areas increase and

increased business business segments and the that results our products execution want to milestone services. highlights performance moment. portfolio But, from in month. financial by just reflect this some of across a and and outstanding one cover Our areas outlook I the provided recognize, broad significant will was first, our strength I retained our four operational

requirements the points, most test test flight the this government F-XX thank the conclusion and celebrated team Since Patuxent Development test the over flight industry River. station, flight comprehensive I chapter. program over eleven jet air conclusion this F-XX and sorties, and would rigorous Design ago, program inception entire have history. like SDD the XX,XXX marking over over Our F-XX final unrivalled aircraft to test successfully phase hours in test dedication including stealth complex System at enterprise to next of program, years fulfilling XX,XXX developmental its completed for and or teams of Naval the as their aviation of totaling diligence progressive X,XXX the on satisfied the and fighter

XX the to the Appropriations in Turning activities increase recapitalize national and support transport fighter helicopters, C-XXXJ appropriated operations aircraft, from of $XXX $XXX multiple the jets, for for XX% included greater level of When Blackhawk support as additional All DOD appropriated customer In Act nation's well helicopters Lockheed well Act ahead sign accounts XX community. and in with production the increases programs legislation budget Seahawk fiscal fiscal F-XX strong XXXX. supported of fiscal in contract. budget received Department look Orion year of our with a additional additional year-to-year clear portfolio were at funding coupled discussion the forces Budget in XX the than February budget of base Notably I'll the increase levels K previous and both missile XX% Act budget budget Congress rose to see to the defense XXXX nation's funding especially based XXXX XXXX four in base a programs year We to significantly XXXX Martin told security. Congress of and appropriations Department need $X with programs representing largest we my pleased our funding raised passed XXXX. XX for very the budget, Martin much amount above and our raised military the billion funding the the the enact above garnered markup, over caps two Defense of over funding. business years. increased to this to all representing in our total Consolidated the see funding as the the XXXX XXXX Defense billion for needed CH-XX over request, recognition with enacted year. Bipartisan including areas broad in overseas close very were was the our key of has to billion, XXXX investment defense increase appropriations budget providing contingency were the pleased budget a Appropriation Lockheed to

needed path our process mission the to fiscal positive that their we that coming by these with same XXXX provide follow them and the in crucial will legislative enable the hopeful are to months. the fulfill encouraged are resources year We military actions funding

Arabia. kingdom would business addressing brief this of our I area on to to update provide for our Before in activities relating a quarter you Saudi highlights like opportunities the

honor Saudi California of this location. Bin of I prince the at Arabia Royal crown Mohammad Just his the Kingdom had Salman of Highness, our Sunnyvale, month hosting

see the building capabilities satellites visit Royal Highness enhanced his Saudi to satellite incorporated technology is into was Arabia. to telecommunications able being in firsthand his provide which During innovative new Lockheed Martin two

Arabia fund We multi of vision million Saudi defensive elements a opportunities XX activities kingdom mission and lead construction year tour U.S. them several our for forward kingdom remain partnership more for system of country. Arabia's ships contract As key March in the the last $XXX component We look the provide strategy. and citizens joint defense part also security four nearly is blueprint service to of including combatant Saudi element we key an their to to historic long help a missile of for Royal in THAD continuing with than of support a on Highness's XXXX May. the his crown transformation awarded of to their discussions our the our announcement line the made of this important were and for some with prince saw and the in kingdom security of air global product Saudi

on more leaders XX manufacturing on Korea the ceremony across a like celebrated during this the the Beginning operational milestone the F-XX the Moving roll recent milestones government Force. for I an follow Korea attended major debut Korea first in update produced year. Force to U.S. The its F-XX jet I public quarter, and several first Republic of XXX would of Air the was of as months. the our at program first took five Korean delivery will during The guests Air to represented program, out Republic Fort with our the highlight Texas. of the was proud Worth, the record, by plane aircraft over at facility ceremony represent we cooperation few achieved and in our corporation of

Commando countries. XXX demand II the X.X of million to the for XX Super the operations delivery ramp we C-XXXJ air continues of line C-XXXJ platform. quarter forward airlift plane than is air up of flight choice C-XXXJ U.S. this decades The hallmark with of proven global production XXXX the varied XX international configurations leadership supports our hours and including to with aero we and vulnerable area, XX of be progress of Forces this its ops different As drawn look our Special aircraft mobility have business over goal platform versatility team continue missions. special the this our and our operators has customers. C-XXXJ come. in tactical celebrated remarkable to model has aircraft special performance this delivering The passed our Keeping mission aeronautics And to supporting force as version. its in on to the received the more latest C-XXXJ Hercules The and our command global

aircraft forward awarded ago our new supersonic will the we goal under above A Works X, and in demonstrator. organization This new X-plane, sound, land program despite quiet will flight Because we passenger supersonic sonic public. build technology first not creates restrictions facility to general of air design, is over The low-boom the built new flight disruptive effort. we few demonstrator a currently with Mach Thirdly, several test, look allowed. travel our making boom contract to an aeronautics be started NASA in flight preliminary its excessive to a the of quiet supersonic of years and will flying travel NASA’s years boom Skunk sonic build reality. not speed will but which of air be design just in a the that noise on produce the of

and Missiles saw products. our we our missile to Moving Fire and continued defense area, demand for Control air business

award our an to of support $X.X additional bringing billion. team lot production delivery contract approximately program value THAAD and and XX for Our interceptors of of million $XXX the engineering received over the

MSE defense and Also kits, PAC-X look Missile honored support segment support protect will award our missile U.S. citizens using lot interceptors, have intended as fifth interceptors to customer. equipment. our and for to provided an to agreement officials Polish MSE spares Poland’s PAC-X advanced Air PAC-X opportunity. MSE, enhancement infrastructure signing international PAC-X Poland we're this capabilities the U.S. their received forces, also and and the We million of capabilities international upgrade missile $XXX over Defense by system and the WISLA to customers and become The armed and or

field missions performed during ships. storage unique the a these the be research precision, of Control, I awarded commend the is Missiles against contract contributing the were HELIOS to combat to navy to the marking like worth Fire weapons multinational Standoff surface This us their to Air-to-Surface tactical a weapons of Joint facilities. million. would total and operation. Missions missiles Before manufacture contract debut In of success the A use I for first JASSM, with initial JASSM deliver weapons U.S XX systems successful with allied strikes program leave in team and and their and laser develop, Syrian board business Missile operational eventually high-powered $XXX systems the and the stealth to launched area, Rotary missile chemical recent the cruise

However, is counter and systems help its unmanned $XXX million. system combines advancing technology internal years provide to it could to options more with layered and development defense support. domain, system the as this sensor to commitment than aerial in weapon first a kind projects designed and including traditional of laser result XX with research long-standing This increased contracts. award nearly This technology, customers is funded capabilities and well our of experience as

to We performance to Nebraska. working be of the U.S for review long to close completion will opportunity the of missile test congratulate with are two year since And ballistic to our performance will Kingdom this space service XXXX. Navy over the our leg honored most This over quarter to discuss of royal XX on launched our kind. The system would launch edge DX heritage and sea navy for two any of mission the like space test and will adding design the significant II USS success. the now Trident in ballistic marked operational the submarine in launches modernize weapon we successful milestone be next program of this are for I United reliable and missile, decades celebrated XXXth Nuclear I remainder the two turn support financial organization the Triad. first from system. the record were and missiles, this to history missile excited of missiles for successful of XXXth Trident and the area, leading certifying by Ohio crew brings. the the its class the to on call our I strategic of business their with XXXX, and navy expectations upgraded our with Bruce readiness

then your will line open up the We for questions.

Bruce Tanner

and Marillyn morning, good Thanks everyone.

along we today. charts accomplishments, our I with please earnings included As web release key follow with financial our that highlight

the this was to were the and three profit results quarter. for the for experience and was last with were profit $XXX almost It’s of driven Four, our high X% year chart its overview Based Sikorsky three classified and with our Fire Aeronautics operating offset both than the a for million four in cash begin driven programs volume showing quarter. and of volume, last sales increased our Rotary in government Missiles have compared quarter. this sales, programs. made about segment to in in share with segment $XXX compare returned primarily given Control Missiles we quarter strong Let’s with of partially about qualities higher start we contribution had the first quarter, on quarter the been missiles with business expectations growth year's and growth these in sales share outlook per of planned and On our We Fire pension for while and an line year. our year, this helicopter systems very in our lower million $XXX while Sales volume. expectations single-digit results. dividends million quarter. due three the production to growth quarter the and results, lower repurchases. in Mission and nearly the through profit our by tactical stockholders F-XX year our Control earnings and both was we Aeronautics higher operating lines business Chart and operating areas by of was by double-digit on

lower of slightly operating large on was a government our the fire program the driven charge portfolio considerably due last as performance last the highest increased to RMS with profit due as EADGE-T profit result as while of taken lower the retirements absence had in of space was control quarter. operating performance year, improvement entire compared programs. well cost year's sales up Segment by last of expected efforts lower the risk across reduction and by at Sikorsky. improved the volume As for and quarter space and follow-on was results. strong higher improved led satellite the year the to Aeronautics volume performance, than buys in our sales continuing missiles

Five, Chart to the Turning quarter. we discuss in earnings-per-share our will

of And enacted our result than results one just show Tax as Our our results Jobs the significantly in lower XXXX. Cash this our was Six, and pension higher segment a tax lower I driven profit to On the have in on last year a cash versus results year in quarter $X.X than last December. Cuts we from last operating of as was profile discussed first an the billion year. contributing trust EPS of for $X.XX year, of $X.X our historical much as the than with XX% so which in impact contribution the results. of Chart pension of end operations in two cash plan was quarter of Act rate next higher from expect to contribution, the additional operations the the our by we lower be billion that planned the third quarters none quarter,

all-in-all contributions generation of plan these weighted contributions heavily in quarter, In expect of level cash negative fact, operations or though in $X in to quarter, year. the the to guidance equal that we be our outlook of with provides from cash we we the second Seven year. million to could than for the operations see for remain updated Chart cash quarter, given our because our fourth from the comfortable greater

rest based Aeronautics, sales for $XXX We of MFC and million space the our are outlook increasing on year. for higher expectations by this

million Net We unallocated and due and or improved segment to outlook change our MFC higher and RMFs. are expense, our no operating to is FAS Aeronautics, by performance volume increasing adjustments. profit There our $XXX sales other

year. earnings operations And unchanged leaving outlook the provide our earnings-per-share billion. next our chart. increase or to Chart than and provides outlook our share Eight, $X this reconciliation we detail equal to from will per are the by prior a increasing are cash greater more We on I $X.XX. into current of for

and area. our area. outlook Our $X.XX segment new $XX.XX. increase Aeronautics, miscellaneous Fire We some segment finally, in Control million. we're range by for increase $X.XX million sales we increase of and show our changes a very for Missiles in revised by $XX across $XX our we outlook million increased to total in $XXX our operating And outlook areas million $XXX On estimated and tax updated performance drives EPS, provides in XX, an by other summary, start operating by space, million business above increase quarter. $XXX strong $XXX RMS in increase total profit with Chart $XX for effective last million provided of than drives Chart above and improvement million our last Chart $XX we good $XX.XX of revised profit sales resulting Control EPS business to rate XX of million in our $X.XX We the have of to of guidance. on updated EPS, by a guidance Missiles operating in business three our year and outlook Nine, Fire the a increase a increased financial total a XXXX aeronautics to quarter’s for portfolio. off and our the a

to well continue our your and we quarter questions. earnings ready our current for as share. future our strength results sales, and backlog see level we're for of outlook that as John? operating in With the per growth profit based increased We on of prospects the

Operator

with Bank And Instructions] to [Operator of Lynch. the Please line ahead. Ronald first you. Thank go America we of Epstein go Merrill

Ronald Epstein

elaborate Marillyn, Yeah. gen, kind I collaborating you Japan on sixth has advanced how Hey, there and view gen for that? and U.K. market sixth been called Lockheed don’t does could about if the Lockheed of some that, good know and the will, if stand on something on does fighter press morning. you stealth where fighters

Marillyn Hewson

excited will details and the the We appropriate forward on Japan’s but we're and aircrafts their experience bring in time to do next them and effective certainly. to share Well, government, at that we that think forward. all, around future capabilities Sure, provide cooperation cost both for we support building time as the could thanks, their aircraft that that exploring our are replacement the help we fifth question. about leadership go U.S. Ron, Japanese security F-X with will critical relevant looking that options and that threats of they are generation of Japan first forward the thanks

Ronald Epstein

vis-à-vis requirements continuation this about sort like I should - And how Japan can the say, wants I conceptually mean, the we F-XX? F-XX, of how a think of an

Marillyn Hewson

Well, are mean a outline I have they will very know and them. you good point, and matter, offering waiting we their experience what at at it’s on great think the we are F-XX we'll have a the I capabilities they the they look really a competitive government-to-government this F-XX Ron, requirements and need, on for so

Operator

next Rumohr with ahead. is Company. go Cai Please Our von from question & Cowen

Cai von Rumohr

so thank Yes, you much.

Just how EPS guide, change from your of the increase lower much is at million and at much and tax and tax rate the it’s your looking how rate? Sikorsky in of why is what a from benefit RMS, $XX that

Bruce Tanner

Yeah, will those. Cai, take I both of

RMS, of So, share say lion actually will at $XX at that the is I Sikorsky. million

we year planned that that, at we're assumed I we right, have up rates traction tax we're place second because somewhere of some some and fortunately insight said through so the next looking little year. some what hoping some more here the had serves assumed in at so, the January. or I we obviously than Sikorsky. the then seeing your put at bulk increase higher up were we some forth rest I in initially, the with relative think three recently, greater the managing there giving think I time previously, in controls relative so the had into in to of me XX%, are is business think and and in as RMS first of actually of getting are the continues about that between benefit we trend we and was $XX looking put that's initiatives bit was that question, little some hopefully we through think the we think cost million expected the to reductions the are side on XX% the so And if start a trend act is act than think of the And hopefully of of place go are opportunities continue I the a memory up that of and to finally systems, and this I have why I what we we the to quarter of better quarters with we probably our of we think actually got had seeing

some the R&D well we well. we tax as been always credit hard working we there benefit as and items As that coming some work of really see really

the today. So nearly rather as we the simply I XX, around year guidance tax right for to think than looking rate XX are were effective XX% provided

Operator

with Our is Hamilton. Skibitski ahead. Pete next question go Please from Drexel

Pete Skibitski

good guys. Yes, morning

of obviously timeline. be I’m may XX think I and program just complete it LRIP you what definitised comments Just more think guys is the satisfied XX the and in mean about talk - about that could [indiscernible] getting do head and for negotiations, just I guys the you wondering F-XX, to are when might you strategy like your if made some has

Marillyn Hewson

to just how negotiations know are the go. in-depth is So timeline negotiations Pete, just we I and that take those would that, we say that in

the just terms to in of go how his the PEO it’s So probably the forward, Admiral better what to negotiations think Winter ask from perspective mean that’s timeline date complete, I is. I his

so we pretty in good feel are negotiations the and getting the they near-term. should progressing about think closure as I the

Bruce Tanner

focus closed closing we Pete some of other is might are think being at point time, more whole this office this at was XX funding the foretell other that with negotiation not mean in getting see thing block program path as issue. too done the I in behind that not some items distant at program like to joint this of I can relative your seen think to open some so an in us don't we I right that The are think get on a that - point, future. get the to XX. progress the We add signs as concert through clearly distant hopefully the recently good we will I XX far issue, and question part future. to too here have on the I the hopefully issue is I XX buy XX on to in least relative the other

Pete Skibitski

Okay, you this halt. issue and - recent how the delivery pass whole a with

Marillyn Hewson

aircraft. We are over along produce to still the are they contractual not, on we office agreement get recognize reach we we expecting. are I’m deliveries we meet confident, we just of we at through our progressing you accepting to that contractual year that. have as incurred, so affecting program we It’s for working revenue joint of based on production so suspension posting sustainment continue are you because soon, are and and will going on with the all, until XXXX. at cost not the resolution on this and F-XX, XX head know that know issue continues aircraft them to with And production we some on a way and this that aircraft a issue we are temporary It’s

Operator

Next we with Sachs. go Noah Please Goldman go ahead. to will Poponak

Noah Poponak

capabilities that here is on in step is decision, have morning where you off short is, closer of been we when to few it hey wanted had big the I this to conversation there this XXXX need that that to spending we're to and discussion with capabilities point just actually Hey ups inflation the need have line reset relative hey years, budget of the it reasonably spending bipartisan the investment sort is be in now defense to few , picture likely level are closer recapitalization need a have we're of but where of these we we far last where speaking sizable and recapitalization close need bigger seemingly step this we're but Marillyn to discussion to still everyone. and ask need. for we we to clearly good at or grow over relatively we have great, ups, is not those to all we that that now been the part be a

Marillyn Hewson

was think I discussions, welcome this readiness others my have spending the you know recapitalization needed as we to was to in a not at the spending it defense caps situation on in and Well well be. in tremendously budget first level our as where been increase customers, with off the on

So see certainly would industry like I it’s welcomed years whole sequestration, terms for and least XXXX that still stability planning there see issue welcomed, away. the limiting that for and everybody of and we which and in of XXXX, can fiscal this have out go as see at we to

the to global are address in So you know happening we stay that out is I talk all called but on unpredictable, We're the there the spend and the the our got in is recapitalization that so rivals that more the difficult think geopolitical ignore we to need be dialogue I a got threats very China to view of focus readiness just that mean with what move they for great of you in secretary is heard there agility my around doing security Lockheed that game sitting much that, we Martin, won't the to what is fact the speed if it in going think say I that's what away you that really lot continue the and to situation the and need world and need mean address on would accelerating with technology but is matters don't to I competitions in know that and there there, long-term near-term out ask have opinion my to I the that, there, near-term haven’t we and not I to about our will important to there so Russia invest. say with it's anybody in defense. enough, just there there and not enough. specific in it's new starts, are investing it we're it’s we would and and threats other power not issues a numbers is on know, not at we continue on is some much is way, I that are customers but

Operator

is question go next from Our Seth JPMorgan, Seifman with ahead. please

Seth Seifman

corporation would've in are you Thanks indicated, the very behind or tenure. will little accomplish that about language that and can looking the suggests your proxy you most the there some of customs was recent thinking one specific on talk much bit there prior about to the longer that maybe two morning, remainder stay good and Marillyn are you as a the things of CEO maybe than in

Marillyn Hewson

of Thanks every to I for the when tenure, and happy corporation, I accomplish, terms every on Martin want the long-term the me so men that women program. this the hard for I the customers. have it and thousands ages support that on intend years determine look so clear, working longer terms question, in to is that so I where the think the XX public Company with company in a long January, of and continue speaking hundred sustain of to at to to for what tenure in just success but of to proxy I with are want celebrated they pleasure do of CEO a stay with our Lockheed does day in I'm my to people down, serve of report as just board with to I at right and us important people I was me are our time their in step make because often well

that needs for today, to on sure disciplined a have we we're the is focus to doing we today also long-term. that to shareholders create make customers the our to to my we performing but beyond on and we know the continue company drive to shareholder are drive work things we're value them manage doing and make our looking in the bring align innovation, and approach we the performance, how how continue that are of and how sure value we with You

in I to I Board. So, annually like and at They for some continue time. me serve the nutshell, of the would pleasure work elect to a

Operator

ahead. go with Rich go Safran will we Please next And Research. to Buckingham

Richard Safran

Greg good How morning. you? are Bruce, Marillynand,

Marillyn Hewson

Good morning.

Bruce Tanner

Good. Thanks.

Richard Safran

your sales, up would So, to from alone. ask I operations flow like you your your numbers, guidance. guide you profit Bruce, about cash took but operating cash XXXX left

opening would part talked wasn't discuss planned So about due to the accounts, expectations spending the thinking I bunch long-term cash And was is, least on second it investment increases as so but to the from just like there your remarks XXXX of defense guide. the at any lifting caps, know to update first if operations a be in the spending above Marillyn, a in could was bit to you the seems what part you there?

are So I discuss about two you you and maybe those thought thinking there items how could that?

Bruce Tanner

We our me complicated Yes, outlook therefore, cash mean, basically didn't leave we and thought nothing first going Richard, first what simple that see first what we did of in the alone to let we then and And then, more the were and the do flow XXXX quarter increase expectations on a pretty right. for quarter. you did thought I to upside the thought, year. in are take our guidance part was we the were

year. quarter at $X the we We than see we here seeing said of that’s than as here flow that higher as today. there. go the translates the typically that of update watch the cash still you what start of year. three throughout improvement to performance got we'll cash that We for to had sit the the the I'm rest if least improvement will equal at we'll and of But, quarters or We predicting we how We'll closely and and have you year on better profit billion very actually yet. much we're into throughout we in see year. the greater as not another some said first go progress

Marillyn Hewson

of on And that answer Lockheed contract. specifically know cycle and will XXXX when for the and the hopeful part the because timing we're will higher we how put out, and your we question, enacted see things the and final just XXXX don't wait are details budget will play and for first there. opportunities to that to on hope a business long get on second are for going additional of to growth, in these we well-supported, We remain our based on we press outs the Martin, be programs still see growth,

will therefore, So the drive that we orders cash the timing will then the and and from see hit; of operations. then, sales when the ultimately

a real opportunities really we say come. always at give you as can’t the do to to than specific that answer other I So look just we that

In addition to that, discrete also proposals could that I other might impact projections. mention, there process are some are in our that

well we the the others. know, advanced and terminology it, the As pilot TX use some typically MQ-XX we're but pursuing is and as Huey for the as you replacement system,

our have those then cash. some timing forward, will and of also into So opportunities the play looking

Bruce Tanner

just during our the bill out than add Omnibus you that over all prepared $X when might what to said we we of closed, mentioned what She little essentially guidance of think just bit assuming well. in worth Marillyn above should billion fact get previously. as were that I more business that we the Rich, a as her put remarks and

next billion we and prospects years with hopefully But the three our XXXX weren’t when as in we lose came $XX some if year billion we could there of have three there with each that of whether number we that, still or that said, over when numbers. XXXX, waiting that win today, are slight billion awards Marillyn to increase XXXX that again that sit budget in talked about Marillyn talked nothing plan on So we the impact over and those near-term the billion really up roughly about that. there are $XX in in in some January the good about, feel here as $X on having has $X are roughly changed

Operator

Baird. Arment Please Next question ahead. with Peter go from is

Peter Arment

Saudi. Marillyn for Thanks Marillyn Bruce. Good morning and color the on thanks

quantified for the in that first guys on of the if quickly at year Thanks. are year. you and then terms cadence be can looking kind opportunity the the possible the just If the of quarter in us in give Bruce may of you and there you a C-XXX or that’s of three expectations the deliveries

Marillyn Hewson

it only did of Arabia we it Kingdom were $XXX as the was that think potential a in outlined Saudi opportunity The last rolled Kingdom up the was qualification and that May. between the were up worth something States if a about that agreements enrolling billion signed I the we like When what have government United recall opportunities agreement. you opportunities of and done

multi so communicated our looked that’s were So those were surface placed, form at helicopters, Fed, stats where to we would of a we opportunity. things, opportunities in mission essence signed have course a number but that of size in that years we aero terms the over $XX we whatever potential what orders and contracts when saw out combatants, when that of in range of to radar, the billion, the forth, of roll communicated of to

Bruce Tanner

that's the the the sort unusual delivers, little schedule that that. we think of a just quarter, quarter, the place C-XXX about in in fell Peter first in light were I nothing contractual first

at look the quarters we for As delivery. remaining C-XXX

going they or might to think so, up or bounces aircraft have quarter one eight, I somewhere are seven nine particular we the it quarter. where average to in

of is on this state of different one the So as C-XXX that new have the so obvious. I we saw last as is much past, being years may timing what it saw just impact programs lot and deliveries, a you appreciate will the cost-to-cost, not the recognized also than than might I the with the this question recognition first in get quarter, programs though. deliveries obviously revenue but the on obviously we what to in be much on year whole higher a not the remind though

Operator

ahead. Next go with we will Please Bernstein. Douglas Harned go to

Douglas Harned

Thank you morning. good

Looking talked higher on Control missiles you results Missiles Fire at about volume for your which the and quarter.

in is a budget We in two this saw over missiles and next increases big there backlog area the significant gain in some year years. also QX

demand a that would missile five a longer stage, you for persist that short-term And see period something look when say this trend drive do at likely more that? So you the is years? or as or what surge in

Bruce Tanner

a will when I of amongst me that things consideration planning period. off Look out I a number plan looked at know is I spot Controls under is that business the take President’s of are to sort that observations the our sort instance. your shot thing the growth and long-range budget pace was three-year areas the three-year plan Missiles I fell jumped into think at And this. on. our without taking that highest Fire Omnibus over from original for of the

the out see for this just that I I a five trend or with it think there So be short-term at increasing is is think years. it’s U.S., we may

not you know categories the increasing one in increasing future. to we looking THAAD single the at I those think are we in every the rates opportunity the missile too Hellfires, PAC-X, every single that’s JASSMs, that always have of build distant our and in GMLRS, capacity,

so would what aberration an I think that's last going is say think a So you is I I not and to my a years Doug. are than in longer shorter seeing judgment duration it five possibility or definitely

Operator

go go Markets. ahead. will we Matt Please And with RBC to Capital McConnell

Matthew McConnell

Thank you good morning.

how rights. aggressive changed some So you you what to about their your you XXK positions or change? intellectual increasingly property that year around on referring taking Could new and had government this elaborate were the has are language what to reacting

Marillyn Hewson

on for all of I sort pursue with the been the Martin cases opportunity the take that to government, across unbounded are but seeing for be Lockheed pursuing - a board U.S. intellectual from while an been requests that standpoint will are that. to chain. challenge just for to to Matt, not mean we it's our there some opportunity property it's and Sure to our have us for may that where we I have an we we difficult of is rights us able that very commit supply that commit there outlined

the the the pre-award did the could have where get we rights we a that that request certify position U.S. that protest intellectual of with to replacement could dialogue that Huey requested, some couldn’t some property for comfortable we provide because in they could property in for UH-XN to bring could to subcontractors. we of all RFPs be of we all a so that replacement, intellectual seen, point fourth our is certify not recent government because had And fact we up the that the we

don’t want Bruce. So anything that’s you just not add or one I know example to if there.

Bruce Tanner

Army think I a Marillyn been we have little or piggyback the replacement where more said, that being for the was I and actually the the example fleet. years using Huey flying yet army far been depots the a on Huey request we have and have with an supported and through program just what long Blackhawk helicopters Blackhawk is would so, came good helicopter force however I the bit is those XX they probably the support Yes, had say aircraft admittedly for Air program data program will or flying to today replacement

the why the helicopter government when to as puzzle supporting requirements for have depots. aircraft same army would that the already And is to little a it’s property So two different intellectual a talking request little scratcher bit about, a often just existing new platforms of a intellectual little are sometimes, for times, with these a that’s it’s head we're what puzzling. that's property

applications. do Marillyn not has a some subcontractors, so IP our Lockheed than cases As much software puzzling with of even with including, to in of as lot some said, software. commercial it that most, a And more lot Martin of

reason protest said the reason the Marillyn we replacement the So pre-award XX-K. mentioned in the it's on that’s that the That's filed program. Huey

Operator

Our from go Joe next ahead. is DeNardi with Please Stifel. question

Joseph DeNardi

years. the pension What Thank could to to relative do to I equity of the next years? of provide cash you. much. as some you next your of very flat that just we Bruce, requirement? five kind that if sensitivity experience assume for funding Just few performance thanks over kind wondered S&P Yeah, markets would the around the

Bruce Tanner

question. Hey Joe that’s a good

we look As we the full freeze get taken pension have that the actually from in past we mentioned that. X, a at And have a January to XXXX. in

sort disproportionately use, and word the up then it’s that's XXXX. of to So impactful right post until XXXX if

which have sensitive typically been believe historically sensitive near-term discount rate more the than until changes the case. less shorter been the because between is We in to but not length we becomes the are just question not returns to day. has asked of we're So time frozen asset or then. the sensitive the the you the it more changes, plan rate discount and We're to sort of fully now by as getting

have gone - of have instead not some And where then but assumed you scenarios. have have X.X%, we I'll for shouldn't assumed, scenarios huge of for we zero we to just say purposes. being too, have return we zero a XXXX negative them sensitivity or percent sensitivity returns, change. think the in It's Asset instance, we greater actually as taken return

say have change will a it. billion changes that would the You of we where in is as being to significant would that it $XX way the to think being earlier total characterize I I shouldn’t about talked we that as something outlook

Operator

next Research. is from Stallard Rob question Your with Vertical ahead. go Please

Rob Stallard

was I to you dynamic chance anything there changes than current But wondering about question for I Thank looks your the Good some how like quick It increases winning. there. would that financially this. of morning. III obviously competition ask And the thought different GPS I you less so contract it makes that also you much. of and peers attractive may there, the Follow contract a is in the situation? follow-on not that On the for bid

Marillyn Hewson

next continue our about but put for III GPS tell I for is are think add are the continuing we to On. submitted our speak release that out the confident we F we lot costs. position producing Follow that can’t those, at I a we is We already Follow the flexible, very us well satellites us are can it’s on submitted in a to to Follow proposal that feel have so So, competitors, that But we we that It’s architecture bring also just III in, as a On. be ones over for that we XX have and down I have you a with more fully today approach we that’s we generation performing compliant allows follow-on. an design proposal another that and for would On, opportunity brought invested modular it well that Solution this we thing one it think low-risk see to I GPS for as

Bruce Tanner

producing in competition is other some had payload first think we first government been I thing is now, didn't as as up, I we place as performing in there. add will could is well the we performance I most might we perform on are of good well also really think are particular Rob satellites that the industry. cleaned the aware really, of about few very we reason have the the the feel satellites, The otherwise issues say I we those I have mean satellites the think for we

opportunity our sort this but going part We see cause not would So a that competitors, question of past the not had I think is for a potential right we want of now, we serves see as program in as the way. extremely change speak peers without that any fact your competition that there. or your this, it or in well is the well our to what the same don't second profitability lower essentially and to performing have of us do competitors to it

that So be driver a my wouldn’t from perspective.

Operator

Rajeev Lalwani with ahead. Stanley. to Please we Next go go Morgan will

Rajeev Lalwani

maybe the several it rate end how growth the over growth thanks not some Marillyn program the the of question. may Bruce looking compares and the trajectory just next the just for to the on if overall getting thoughts beyond. some and of you company top-line see there be around F-XX on for and can how years decade Hi, just the discussion and to the out provide of program, on you revenue thoughts the

Bruce Tanner

rate terms one to faster general Marillyn can through than that and top I the way cover in going I think decade. will F-XX, the if all F-XX the at take Rajeev add a Yes. program is the end to, of wants in she some of look grow is the corporation but

cost-to-cost that we of aircraft tell to We so should that timeframe, don't somewhere end think you that on until the the I not F-XX the production decade sustainment in think add do growing even the that where that are peak since that XXXX down. growth significantly sustainment, obviously help or thing will sales number there is until push but were going still reach even even also of in sort last In this so and we the the idea, is we volumes international as you bit Marilyn is occurring modernization the in recordings remarks, that already the decade. the that spend it’s follow-on were the I you fact field between the of our deliveries, program, completed of customers little of I when that of timeframe and do sooner beyond the you it’s But would the is F-XX, position past will. government the left now to for The future if a production is XXXX think with getting expectation the of to peak said those well. plans then as than just is then STD though end in should prepared there sheer dollars starts would U.S with place for not slow her

So level sustaining development. there be will of the

that Just currently like work decades is and there that F-XXs modification their period. and of we're development F-XX's a are production past sustaining and doing peak level

see program. for to the going that are going on We long long, F-XX a time

Marillyn Hewson

we the and three eight the another U.S we record The world sales that that production of for as continued will we other partners countries currently international around buy be continued be for indicator the the said sustainment the we many world services, from that see coming a course program modernization is three partners, of there while that Rajeev military add thing program is year so and to revenue interest production F-XXs to upgrade. the talk so and lot can would as of I F-XX beyond more about we but what that, program, want with around F-XX, a the plan on have Bruce of and have selling the that expect in the

Operator

George Research. go Shapiro from ahead. Shapiro question's next Our with Please

George Shapiro

like validate could on the Thanks. the F-XX and wanted many that what the quarter. numbers flow on And Yes, you rate then good have currently how kind Air based hasn't that. it raised to gave, that the taken looks on impact had so cash might morning tell just second, you of deliveries Bruce again margin you the Force in us

Bruce Tanner

I greater this think I some last international there increases Yes, where quarter. and place those a was again, drivers Final is program, George, the of example as was of performance going quarter so the did biggest once is year so slight facility, actually a I recognized single the our some Assembly this benefits are and taking we on FACO think on Check this a of had F-XX this extremely seeing we we're another we it is some pickup year recall good Out total well the ago questions than of there,

that nit lost where track any the or way recognized on cash, the that’s the cash impact primary number of because those collective quarter that's question George, F-XXs, relative have huge impact of single because earnings a event. of F-XX we not in the in quarter aircraft most it So lost are to I in say want sales single-digits revenue, occurred withholds but was hold the then mid I weren't going slight for program they change of didn’t said later I although the would to to its get obviously the say track reason so And upper other on to it that digits, much was upper - in the

second will behind hopefully be there expectation us to got come cash and our quarter in no impact second the would be, we So have this quarter.

Operator

Next Barclays. go Please question's ahead. with from David Strauss

David Strauss

and you a accelerating about Thanks, and the line obviously means have on good X% I'm so through talked put X% X%, think implies normal for number talking forward, resolution accelerating that to follow-up as try this you potential budget billion X% know come what in X% like that the it do Thanks. and to past from the us growth from top saw going just then finer growth and morning. growth kind X% in that saw there. Wanted upside X% point to C-X through you year for given a extra that to you if come on spend could in of what $X you to to XXXX, X% update Bruce rates

Bruce Tanner

I'll you credit you got give good for a one. there, that David memory

cases is $X question a part we itself million in say almost at question awards capacity good we terms really add to increases it's see the $XX that billion first on modifications contract time, of that and programs The is differently this, those at the phased-in one, at unanswerable some in this sort like manifesting our going guess to or it's year. and to of to are a got your I'll they're my actually missile of a all get in contract least point and existing question's so this start when some

any expect this XXXX to out shift of spread my and general I would will timeframes guess say a that. than maybe see XXXX, is much further it just of in even and XXXX, So wouldn't I little in XXXX get over and

the our like to the we sort suppliers for instance, those are going could suppliers. quantities of in and them buy, would XX, off in XX Let's out F-XXs, think of somewhere getting aircrafts talk down right to get I but now block with the XX, we locked

give I and of the to give insight the person, what happen going it would David, into on depends think when But, for I along, like you already better XXXX, beyond the again XXXX betting time. in trend get authorized information to to in obviously, XXXX say XXXX will will they better as So you contracts and most XXXX, the it looks insight definitely gets and we have. we'll were talk we should modded when that that but that’s we try goes if I because point year October it, about, at timeframe in a

that I aircraft, to your is C-X any on we the a makes total C-X the more have on last if closure David. last lot the of that finished third closed in, question we guess year, delivering program is, get like, quarter think literally My adjustment. modernized equitable news that I aircraft This say this I will sense. action is once on the that, year. is think I don't want

planned our from relative to that a this if nothing this doesn’t or like plan this again, don’t because happen perspective, year it’s it we downer year. not hit to that’s So year, a have

haven't very in still we future we We well, about talked a that, expect good the but have as frankly, case there. years

report to short is news no the So, answer.

Greg Gardner

time for have question. one we think I John, more

Operator

be will ahead. Research. Please Hunter Wolfe that with Keay go And from

Hunter Kent Keay

Thanks morning. getting me in. good for Hey,

the if supersonic the design and into your wondering market, scenario Thank do I’m X-plane, this market reenters the a your LM-XXXJ is with experience this that. commercial commercial the there to technology? Lockheed is On you out if how moving you. remote where aircraft persuade proves might

Marillyn Hewson

point, happy a and commercial Hunter, sold LM-XXXJ have your we to do the we a customers follow-on to are have some Well, that we to It's as offering. back. years that to LM-XXXs XXX

into to or having another is we seen, we a Skunk we that on are you opportunity that probably out supporting and commercial is its we we its of come but here, foray on bring the to fighting voice and I the terms whether our support. is technology new this, technology coming support working also bit cold my is that is engineering too knowledge us, can Aerion so a other low with and business experience what we Works, point some don't have is lot refresh aircraft are jet here, commercial being I that NASA scratchy companies things. out an with bring can jet we're a our in company what So I'm technology project technology. deep getting technology other much can side, are and we But supersonic that bringing of support and apologize. which boom the mean with them supporting as to company their offering into aviation that the boom, this read low

as of earlier, work have to are to directed level. NASA we to technology a hypersonic the I lot with some take energy. boom mentioned done and in to on we side. So advanced And next advanced it; military there engaged that working and on this follow-on now it of as our Works interesting labs a lot across is a And are Corporation, low the help the both our technology Skunk technology is fascinating commercial operation working the lot and

Greg Gardner

top hour I Greg, come John is we the of this Thanks, have the think here. up at

some So, it I'll over Marillyn for to final thoughts. back turn

Marillyn Hewson

my Sure, voice since it I will losing make I’m brief here.

However, continue that just to for our [Technical our thank to and long-term and value highlighting and an we to well you deliver stockholders. be customers we outstanding to Difficulty] have quarter all positioned by

forward look for call the on and concludes day our joining John. next call us the we that So

Operator

does Thank and your executive and using that gentleman conclude for participation you. Ladies teleconference AT&T's service. conference. for you your Thank

You disconnect. may now

Lockheed Martin (LMT) 24 Apr 182018 Q1 Earnings call transcript