Very nice for LMT over 3 years as their current sales are only $54Bn so + 20% in sales AND of course, they still have to maintain and repair the fleet and that's going to be no less than 10% of the $34Bn a year, probably more like 20%...
- The U.S. Department of Defense says it has a "handshake" agreement with Lockheed Martin (LMT -0.7%) for the first multi-year purchase of F-35A fighter jets that would cut the price by 8.8% and bring the price of each aircraft below $80M/year earlier than expected.
- The agreement is preliminary and a final deal is expected to be sealed in August for the 12th batch of jets worth $34B, Reuters reports.
- The first-ever multiyear agreement for the jets represents a shift in sales practices from annual purchases to more economic multi-year deals that lower the cost of each jet to $81.35M from $89.2M.
Also, their R&D expenses for the F35 will be dropping too. Unfortunately, LMT is high in the channel but I do like them long-term as a fusion play as well.
| Year End 31st Dec | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | TTM | 2019E | 2020E | CAGR / Avg | |
| $m | 45,358 | 39,946 | 40,536 | 47,290 | 49,960 | 53,762 | 56,463 | 57,983 | 61,043 | +3.5% | |
| $m | 4,505 | 5,012 | 4,712 | 5,888 | 6,744 | 7,334 | 7,892 | +10.2% | |||
| $m | 2,981 | 3,614 | 3,605 | 5,173 | 1,963 | 5,046 | 5,593 | 5,799 | 6,873 | +11.1% | |
| $ | 9.04 | 10.1 | 9.93 | 12.1 | 13.0 | 17.4 | 19.4 | +14.1% | |||
| $ | 9.90 | 10.1 | 10.1 | 12.3 | 13.0 | 17.7 | 19.5 | 20.5 | 24.7 | +12.4% | |
| % | +17.0 | +2.0 | +0.3 | +21.3 | +5.8 | +36.5 | +36.0 | +15.7 | +20.3 | ||
| x | 20.0 | 18.2 | 17.3 | 14.4 | |||||||
| x | 1.27 | 1.16 | 0.85 | 1.38 | |||||||
| Profitability | |||||||||||
$350 is only $100Bn in market cap for them so dropping $5Bn to the bottom line is still OK but I think this news makes these earnings estimates too conservative.
