Lockheed Martin (LMT) 18 Apr 232023 Q1 Earnings call transcript

Good day and welcome everyone to the Lockheed Martin First Quarter 2023 Earnings Results Conference Call. Today's call is being recorded.

At this time, for opening remarks and introductions, I would like to turn the call over to Maria Ricciardone Lee, Vice President of Investor Relations. Please go ahead.

Thank you, Lois, and good morning. everyone Martin’s welcome earnings quarter to call. conference like to first Lockheed XXXX I'd

on are Malave, the Chairman, today me Joining call Chief Officer. Officer; Financial President Jim Executive and Chief Jay our and our Taiclet,

Statements a made description not are provisions to the forward-looking those considered to differ of statements. pursuant that for federal our and see SEC that made press factors Actual safe projected today's historical materially differ results are may those fact statements in the results and some today's in forward-looking the release call of are may forward-looking in harbor securities Please from laws. actual the of statements. filings cause materially from

address charts We our be click to access have Investor website posted include on also used website charts. Please our charts measures www.lockheedmartin.com follow and to the at comments. in during supplement our that These today the regarding plan information Relations view and non-GAAP call call. link may to the today's we on that

like to to over Jim. turn call the I'd that, With

thank well Good of Presidential to for in a discuss will everyone, Budget and XXXX highlights with results and begin full-year and quarter, I'd first you earnings outlook overview detail. Maria. Thanks, our today joining us like the from then Jay few as quarter XXXX an morning, as on call. Request the our financial

laid cash our return in $X.X of year-over-year. combined remain $XX.X share at January. operating grew for by full-year a had billion financial to led margin count on in we contributed track year out MFC led the solid free flow share with for We billion XX.X% cash XX.X%. growth meet by start sales to year-over-year lower and We growth flow quarter space. as and with was growth expectations first the XX% XXXX to XX% Free to to at Segment the a the strong

of free through of deployment, to deliver quarter. cash our XXXX or we stockholders share focused strategy shareholders continue per returned approximately free cash flow $X.X remain of to and XXX% of growing in the cash billion to in buybacks. to flow flow XXX% long-term dividends our free We terms capital plan and In our on

The Russian is defense preliminary proposal details of with PBR and posed Turning in cooperation budget. billion Budget of ‘XX FY ‘XX March. China and a the Martin's budget added to $XXX solutions. Request or the Ukraine administration for security President's an Lockheed and the is driving national has heightened funding. the ‘XX by FY over billion released early on increase emphasis the allies. budget invasion FY demand peer created This advanced enacted reflects effective request near X% DoD strategy The of or threats $XX The defense

programs of XX PBR the systems. rocket PAC-X LRASM. launch FY of on procurement during course proposals authorization engaged These guided multi-year classified The in in include facilitation Key We're DoD of JASSM aircraft procurement an subject process. highlights continued and and includes appropriations funding also advanced approval proposals also defense increase funding for long MSE congressional procurement parts and F-XX lead and in are for requested time multi-year to of support with ’XX multiple and expansion munitions. the for investment

to increased weapon, The and defense prompt next conventional key with areas space also bomb programs. Martin Lockheed long received key technologies and technology XG system interceptor, such in microelectronics, strike, operations. PBR priorities funding continued as defense, joint includes aligned efforts investment development other Hypersonic technology all include investments Furthermore, generation Hypersonic domain range

process. through the forward look authorization and this are by encouraged to We initial progression appropriations and request its

partners. national Ukraine also from We and elevated demand supplemental allies heightened on prioritization requests spending including security anticipate and emphasis Congress, from

the in program, XX F-XXs F-XX the the in aircraft. procure announcement included support from will signaled for administration. it PBR Moreover, international the marks II F-XX aircraft milestone January Canadian services to that the Turning government's strong the another the and XX continued Lightning demand

to And resumed government in equipment are then engines resumed furnished and As in deliveries February. operations deliveries which flight March. F-XX production, of

of However, XXXX due impacted we do deliveries timing. both X expect year, maturation a total to be to and this hardware Technology delivery Refresh fraction later expected to software TRX related or

some little effect delivery potential from no on to adverse However, our any will we on anticipate XXXX in material Jay a this and moment. no provide therefore impact more delay color P&L. revenue

Also F-XX took Block XX to and at Aeronautics, built Greenville the Bahrain. first flight was delivered

or I chain. for customer additional the wing XX supply partner XX countries form announce aircraft and bolstering F-XX while produce CEO related I while in March, the U.S.-India Lockheed jets. quarter, the the memorandum six industry selected signed and customer, addition understanding letters as Tata demonstrating Block in F-XX Jordan have the was to Limited Further In in and to Bahrain Bulgaria our of have structures joint at to agreement privilege with had Structure of India Aero our commitment Martin to an venture to the the India

is the weapon see CPS. or system continued prompt the investment conventional it the in to strike Turning encouraging Hypersonics, outlined to PBR for

the U.S. begins than it Mach integration missile an initial flight for hypersonic based CPS, critical Navy long for United the awarded speeds In this Ships As recognizing sea technology. range States. testing advancements February, and our Class contract Lockheed Zumwalt for Enabling capability X. at in strike first the Martin greater

First the mid-XXXXs. delivery expected is by

and we glide continuing the speeds rapid launch also known the Air customers' our and weapon supportive reliable order as and is to technical final hypersonic at safe, and system of to in response of missions ensure of are plans. our the future advance maturation product Aero, the testing body Regarding missile

strike late weapon air in and the in a March, anti And during Research hypersonic affordable and rapid and announced all carrier performance flight critical the weapons the we the the capability of the flight awarded of was down Navy's test begin Lab. support of its also HALO. as breathing Force strike breathing based for second Martin accomplished the DARPA a second Lockheed also development completed objectives a January, and test hypersonic and We In with Hawk test, fleet. the decade Air the concept Navy U.S. known launched development partnership to requirements. step first for selected design next the hypersonic or air air contract capability offensive surface fielding over including

including for a meet we to vision As this accelerated just hypersonic U.S. to developing fully a company, deterrent in remain security memorandum of timelines its need advanced are to the of critical a develop committed understanding aspects security. solutions wide We allies. additional the Juniper integrated our hypersonic demonstrate Networks this posture in future. network and with solid XXst Century in to of technology The several area national that quarter, customers and our software jointly on with solutions the and this defined element strategy hybrid during one announcing area establish

domain Mission Routing, of where movement joint for across capability to in a real infrastructure This and all operations. Aware Dynamic routing enables foundational dynamic military evolving shifts and the commercial mix time resilient according a technology This mission of data communications conditions.

customers to as and Our the information to data environments. operate the of contested assets flow crucial maintain give solutions their rapidly in adapt flexibility

challenging to to networking the the and We to as and Force and Army, the promote I impacts as meet well countries Congress at CEOs digital the and working analytics maintenance to technology, keynote significantly address U.S. Navy for And Mobile Barcelona, Air and exploration World improve our a also technologies to environments. advanced had variety for in simulations led unmanned of advance encourage solutions operationally to operations opportunity of performance demonstrate platforms protect across a innovative to XG with communications of aircraft, us and the deliver mobile industries space capabilities. our together and

defense our is the that our air in energy. parameters. targeted laser, deterrence system to demos. improve of Recently, the the class aligns range advanced accelerating in achieved XX Army's performance short test RMS in Century the meets Another example system's technologies energy our arena mission. directed This design of of High conflict to energy, our leadership weapon defense laser's unit XXst initial optical which success and national laser kilowatt with verifies directed

edge demand many high systems cutting technologies, and our well-known absolutely on for to delivering continues to of addition performing strong. be In long-time

high government the Lockheed a or beyond announced with defense And For well High Mars, continue to Australia Australian Mars. providing January, capability. the partnership Martin force systems reliable, rocket purchase High proven artillery the example, familiar we Australian with grow mobility significant in now of XX our

globe to February, countries In all-around, for sale and military it. announced between was year. begin the multi Australia XX unmatched use of for slated military United for helicopter the other Australian an an Hawks a for and agreement around as this The the Hawk the remains early XX are States deliveries foreign and Black that Australian durable role Army UH-XXM Black governments

The joint industry to Australian for the known and the by Further, bidder the provide satellite satellite for multibillion as military Commonwealth robust its we're announced ADF to communications dollar component, solution a selected as April their work in and excited preferred XXXX. JP-XXXX. versatility communications of there Lockheed that project resilience. was defined Martin otherwise ADF This its with and will Australia with develop sovereign Project

over and questions. I'll that, With you to turn the Jay call join for later

you through results consolidated I and and XXXX our for Jim, good our area business everyone. and first will outlook. cover Thanks morning, Today, the walk quarter

along highlight follow earnings I our web with release with charts today. please posted As have our the we results,

meet to profit, XXXX consolidated start, Let's an a delivered overview begin us financial segment positioning to with in the over billion is with of sales XX.X% our commitments billion $X.X in operating resulting for in off segment chart $XX three margin. and We year. just Overall, well solid results. operating

cash was and share share $X.XX Earnings solid flow, dividends. shareholder per we a generated to free billion $X.X enabling of and return repurchases,

anticipated. our independent results development Lot Our on to the financial track continue to first the with production. for And These in the year. quarter growth our expected order second are book-to-bill in expenditures ratio $XXX upcoming capital strategically million this of research X.X for invest expectations from quarter, as and the we quarter. F-XX backlog was increase with for XX strategy and With

operating space down first and by sales growth. step quarter X% from Segment chart look slightly Taking XX% contract the higher mix profit earnings quarter's as equity four, lower ULA led than way ups. as the year-over-year volume the closer segment profit sales increased with results and benefits with on a consolidated offset was operating at and more X%

As mostly the contracted expected, earnings ULA. to margins from lower due equity

$X.XX FAS/CAS up on impacts On flat. for segment were count. an were expense mark-to-market per and basis, lower or share profit, five. investment earnings EPS unfavorable X% offset from per the interest earnings to share was the income share gains, Adjusted Moving adjusted operating pension XXXX. over GAAP year-over-year chart by

on as and of free million of $XXX capital payments supply Moving the cash expenditures, six, chart support over accelerated flow we $X.X $XXX well generated the nearly in chain. quarter, of cash nearly flow including billion to million of as continued

to cash expect quarter share $XXX the throughout we XXX% Our which to shareholders had repurchases $XXX paid cash the and year. we accelerate dividends. million In Total flow. was is quarterly of the cash free in in of deployment plan on track, quarter, return almost million

Moving starting to Aeronautics segment results chart and seven. on with

offset decreased offset by volumes. program First classified and profit Aero contract favorable the quarter mix. and Lower sales as Operating profit prior from lower sales X% adjustments F-XX sales by than at volume lower year higher F-XX production impact slightly net partially were year-over-year. partially was was

delivery the year, and to X previously be lower due we For with deliveries F-XX the timing. maturation Tech hardware software expect to Refresh anticipated than program

cost we We will not ranges as the change previously had XXXX maintain that profile but we our to as the year year. Aero’s in profit sales do communicated and production progresses, for January the refine the throughput impact expect

decreased sales missile contract as programs and net volumes were Looking driven and volume air by as global Control partially favorable profit integrated Fire offset was our on by sustainment, at partially sales missile in lower down sales defense. and page X% Missiles offset sensors well tactical eight, adjustments, Segment on profit operating as and growth strike by mix. lower X%,

Mission and page by CX X% by Hawk on down radar ISR were production offset volume Systems Black profit sales on was won favorable and warfare nine, integrated from lower were important area programs. XXXX, Guam, Rotary At declines on and our partially driven volume for XXXX. net and of Operating RMS and adjustments. sales decreased timing Defense lower in volume sensors. XX%, that growth to due Including profit programs systems of an These

increase on business area. fleet driven Turning XX% ballistic to favorable profit programs next up earnings by interceptor program missile XX%, the and further in the strong gen classified in lifecycle on Operating growth quarter and boosted the Launch the and offset programs. partially our space up by profit from lower Orion, favorable and communications, equity chart were Sales United by protective was timing by and volume driven Alliance. XX adjustments

Okay.

XXXX for outlook page Now shifting to on the XX.

the metrics. guidance for For year, we are all reaffirming key

$XX segment in expect of midpoint. to to margin the continue be billion XX.X% We sales $XX at range at operating with billion to the

expect first billion, of opportunities to still cash we position We these program We billion at flow shares. quarter repurchasing year. commitments orders, also free $X.X execution new outstanding continue to us results we expectations $X as or above while the deliver achieve throughout to believe our and pursue add

Right, so close on with page summarize let's the to comments. XX

solid as expect guided quarter flow a key previously free start growth As beyond. to XXXX and continue We financial a consistent represents reaffirm to metrics noted, return first growth. cash and to in With per share XXXX.

and creation our Century on With Solutions spending. discipline we value to our continued our and security Security growth our expected focus aligns are track ahead, focus for increases XXst strategic shareholders. to execution, on for Looking meet on long-term and expectations with defense

up open Q&A. the for let's Lois, that call With

will Thank go JPMorgan. ahead. the line come you. Our question I'm Seifman first Please from of [Operator Seth, from Instructions] sorry

that Hey, a here. would of, losing Jay, CH-XXK, classified charge with of, of I about Bell? you it new talk not wonder morning, that of like everyone, there is returns competition. that I you investors, development that, FLRAA on investors I are, ULA adequate I kind Sikorsky’s I'm the the indicate for bid a fortunate work? my missile bit a on know headwinds, XX% say and could win bid was about consistent kind if seems Sikorsky to of the profitability little what about generating Good talked that guess so And can some much. apologize process thanks GAO very some report was little you did But And bit voice

Seth. question, Great

obviously model-based while significant include included the that a was favorable improved to was FLRAA. able did thread offering benefits that's to and continue And proposal our efficiencies multi-mission support Let The me of were that we offer. by and amount significantly technology XLMX. enabled digital we pricing, our that possible acknowledge just believe best to And the we'll of itself competitiveness the offering value. the say expect our on We're XLMX at disappointed. cost future. the the We case requirements that enhancements adoption made aggressive the of in our and pricing best business what

the the As your we short-term look Seth, affordability. matter a to we for it, we conference gain NPV, I it different us. generally how I a look that case I've these for classified said provide some think at IRR, long-term speaking, program MFC, look relates as we at business to at gain. -- is looked evaluate in current we that's have take of And We at the little all But pain metrics, proposals. at the mentioned bit long-term fact does at of

making, part And of we so, all that we through as decision that go management provide. the the can of technology

do wherewithal our we to at don't it we As offerings have returns. and capability you pricing technology expense of of outstanding financial in the to expect, we would provide the customer, leverage, have favorable the

we have contract to was press taken development working was agreements There older in add, something the related adjustment -- a on a small no on release. there Let CH-XXK, development currently. that production on the an me forward just the adjustments did we're just contract,

you. Morgan question Stanley. Liwag Thank from Please The with ahead. line go next of the is Kristine

good Thanks, Jay. and Jim morning,

it the But you year? has years? some an assuming conditions NDAA, program stand sustainment this of us talk XXXX impact program? could you over coming the F-XX, a in the could profile by set performance-based deal a time. that over deal transitioning and the seems where update And in the ongoing meets of for been this the reach would in how possible contract it's PBL give the logistics overall work terms to On like then you So, PBL the

customer, to Thanks, It customers over inventory life availability over decided us program estimate of for our -- but this Kristine. enables And to expecting the this proposal, we right to use awarded. be and material our most of And the the of the It's a are this and efficiently type proprietary the did years, the an they not need five as a really is we excellent what solution. win-win end the utilize provide for frankly, the solution question. only real-time to is next think for year We best it. the material is by program. requirements offers modeling of that

And so, are that we're their the able requirements provide being them to maintain, readiness need necessary. obviously, when to take shoulders, that they responsibility able levels off to the

not customer. just think the the industry as a next for again, services, the just win-win proposal also joint whole. years, five the our it's right for overall, we And we not but solution so just long-term think And over -- a it's

And Kristine, path this tracking and on with establish enterprise we're we're a F-XX to we PBL too. what customer think that's a year

is The question from Research. Rob Please next ahead. Vertical go you. Stallard Thank from

Thanks so much. Good morning.

Good morning.

that Jim or things us other your on I so whether update in or issues could that if was give chain commentary, have labor now an situation you just you Jay, shortages actually wondering things supply or mentioned improved? and

part, to of the there Ultimately, quarter. where them delivery, both fourth Yes, are it's pockets continuing issues and that the year, continue that it looking I that that the we was I strong plague the MFC and some quarter lingering to think potentially made a seen the a the had due at going was the partly at the in chain that -- comments performance Rob, still our supply I was for saw at most comments few impacting some public question. shortfalls most particularly throughout visibility we're in us. we've some good we’re and think RMS,

and QX of what from back year. didn't in half really performance get last the better delivery On-time really saw any we

we're the expecting of to any expectations as the into we recovery significant reset we as we to really XXXX, type quarter the year in of when not back of So second XXXX. go really expected, going end

of in So, saw first essentially same the we more the from previously. what quarter

Jim. that or We're to programs, Rob, used we best chain now, across was here of more business this did own on it one have And Martin Lockheed really be fully chain cusp the call then implementing that And management. managed. its we unit it's even narrowly within business concept supply each in supply areas, practices it,

between. aggregate of MFC so, we're the across together all to bringing in and now supplier all for from each everything And Lockheed Martin demand space

are also aggregating so the we're at programs everything to parts more we our then, raw materials that And suppliers synchronizing cetera. more from components demand actually requirements that buys et from looking in and bulk mid-tier company using have of can that different and up mid-stage components, through and

strengthen best our we're that So, total supply future, company will addition hope from I kind good industry practices lead will to -- supply will and don't the I too. reliable for we chain more I think help implementing demand our in practices of, their be the into lead improvements. those, have by base where that the in

from ahead. Thank from The von Please Cai you. next TD go question is Rumohr Cowen.

much. thanks so Yes,

strong is quarter I up hitting, still in update in that classified So, into had does first out MFC number think XX extend? terms us of -- missile yet far at that future given program very the profitability XXX this was how strength the talked Jay, is and the and you margins. bps what the on you you XX.X% bps Can of to

be future? where have we should potential, that price also Northrop options any out, some out you of know, looking other maybe you do aware or programs programs the then in they B-XX exposure maybe mentioned, on broadly, more LRIP fixed-price And on fixed have

Okay, for thanks, question. the Cai

they -- MFC just a had me strong address quarter. did Let have specifically

so year, of to quarter, in adjustment go balance to look In profit and year. the the quarter going step-down the going throughout essentially where here. they that's had If a the have, they're we you the from highest

this as an with Secondly, we the of more will year impact dilutive classified in back see program from the margins of associated the half well.

becomes this it would expecting still there, And cycle I a in of due we're half QX, in balance XX% to more really XX.X% lower dilutive with two step-up year range of for in the the the will will down step-down to The in back year. adjustments from and be the the the expect so items. the these profound be full-year range impact, in profit it

keep and -- multiple it's programs continue We took production one that's As I an are at currently charge and in a Aeronautics, other far on program, the laser-focused customer’s as and But so still requirements on years think, out. eye had that much monitor objectives we're their really program we’re program, that the we and it team Ulmer we development. that really driving the Greg that We've that one we pretty meeting and to that when in laid managing that's tracking. to have of continue to have on. doing that his -- fixed-price the development fixed-price and schedule large we XXXX cost

there. to back next in the program. up, step from to predominantly from it'll four for the and to XXXX stabilize probably going this probably be Just MFC we're of terms on outlook, pressured the It'll then and peak going out margins, years in five

question asked The the profit I've they absolute to question whether answer other can that is is on -- yes. question MFC and been grow

will And so Overall, be MFC. five maybe we to we impact we flat another. may may while the see see at year dilutive to to one profit profit four some next grow years, from over margins, see

so, you, questions. Thank are pretty Cai. And to those much your answers the

from question Ron And you. ahead. Please Thank from Securities. Bank of next go America is the Epstein

Hey, good morning, guys.

morning. Good

you bigger-picture for -- question. a question maybe A

kind of, on business And so you and program if about you How about think so Now more so of that that Secretary how speak and Kendall model, of that? was out forth? NGAD don't that change the kind re-competition factor really owned the contractors that by and and having of does DoD restructuring I talking and know that about is the could, constant IP anything? without does

got what and over years, cetera. services, worked itself crafting property, constantly aircraft. If et concept are government history we're is stands look and management the a NGAD on Dominance Jim. rights, going for formalizing then have it's with call company's the like with to Ron, DoD progress, that NGAD continue Next-Generation The do Air in and and We'll intellectual government is et cetera, they is I'll it. to

win So, class kind air-to-air think [Indiscernible] of combat. F-XX, airplanes F-XX, that

so, open architecture mechanism basically Skunk are a working which and approach there. We're out proprietary accrued sort fuel Works standards the do property future on industry, -- intellectual implemented mix in and we're to what et still more to on vehicles forward. of that of advocating And operation there'll entire demonstrated with be to spacecraft, and through spacecraft or cetera driving We'll one range the just government satellites rules any architectures we that's protocols as a inflate. uncrude But being be concept, unless docking options wide either we and formulated. strongly for fees those of and with may for of -- replenishment the the data go frankly, can a our

develop So always that so kinds architecture, things protect customers effectively. the with to we can our IP for compete work advocating open we're that those are we'll create the property of for rights guard we and and intellectual to we the will and continue

Thank next Pete Please is question you. The go Advisors. Global Skibitski ahead. Alembic from from

program the could how Thanks. big know I through changes Hey, go? today you where big where where variant. good, Lockheed was everyone. on CPS just don't could you could of to be, things but get? more sort could in maybe and Hawk you add How morning, with Hypersonics that Aero with your wondering in and I the us stands Jim, good if you're walk Obviously, changes made of looks can Hypersonics color just at light some

a then complex endeavor. cetera. give a Sure, go construct take Jay, side you of of it offer I'll is the growth the could But kind and opportunity where some revenue of, to, and it's the et scoping Hypersonics -- business

You forward. different can, missile vehicle aiding of, breathing, -- type of inlet right? air the oxygen build so and a propulsion docked in there's it's through is to continue system provision There's atmospheric two One cruise of think where going propulsion your technologies, a mind, kind the matrix of kinds right?

separates rocket boost the is glide, the propulsion space momentum, launch The off vehicle body, other warhead by gets the it's with a the technology rocket or that. solid called either more it's rocket from or to like the ultimately goes, it's basically almost, for boost the it the of vehicle fact Launch glide big from the It boost. got equivalent fuel kind already a that and then on and been and it's provided it's Pad called

glides one another, are everything is technologies. So, the two propulsion those whose

the And And could of Army we're matrix or have this are have is you that's land-based based ship we launch, calls you that of CPS, right? talking on proportion can vehicle, you about notions launcher the source then there Director, launch So, vehicle have which Tell the a could Transport hypersonic launch long-range about head, weapon what speaking the often aircraft. are you go to your what about? and platform, off

of So, let's those. through just each really quickly go

CPS the similar That which is see vehicle. there's hypersonic government could is ground. town, on So the program the seer range very game be that glide joint boost it’s long is Its weapon. the and to the in range launch long or bet CPS, its weapon it’s it ground is based essentially right hypersonic ship-based placing now, is where surface and

contract that services. right pointed that You have or now out we that for executing both on

concern systems, to into air Air That get to you right? breathing, when are two size Launched, have you Then that vehicle, a have launched and so the have the air launched propulsion you account. the vehicles Hawk HALO air take

discussion Aero and hypersonic in air that such it's have will going can debate matter is the that’s weapons weapon. the battle. what a heavier through we have force aircraft, which bring glide to of services. the So and to they program, vehicle, product and the the to or ultimately boost the testing Navy use into carry what And such been that's larger a going The airplanes be a a want on the

all decisions. to way program government CPS. matrix if supporting this point production frame the We're or either the with all you program of this. like will at That's Those are all really development like Aero

be. I'll Jay some give growth of, kind a company what give for could you on and chance to, So the there scope the stop

-- it's us Jim all about today, It's programs in $X.X business the of that Sure. those for aggregate, mentioned. billion a

and continue some it's We that our growth defense. smaller four and be than upside hypersonic related of growth provides it's that It's to expect pillars, the a there's because one -- the largest grow healthy not contributor. of to to But to contributors. it still growth other

our I that solid [$X.X talk with just weapons these growth, about $XX in it's Jim so mentioned. billion] And projection, it's to systems really billion, going (ph) when embedded growth

from ahead. line question is next Global Please Safran go Seaport from The Securities. the Rich of

you, Thank Jim, Maria, Jay, good morning.

Good morning.

where your could remarks know on maybe of So just the Wanted if you're interest finally seeing signing-up some in are the now? you to could international equipment? what orders award expand I wanted most if know types versus demand in about commercial you're opportunities demand. seeing direct opening Thanks. timing international here, of FMS more discuss of you international for to And that you any

Rich, international. on good question

years next alone, our you each talking the we over out you're us be It's contributor strip embedded significant high-single-digit when For growth. so, But international or pillars. growth international expect to five there. a to our amongst four of

you're as FMS, well program. as F-XX far most munitions is dealing that, as as contracting of As particularly concluding it

side got embedded So the on that that is now we've in related. our growth most of particularly forecast, right FMS

it's has been his remarks, prepared of really program, business. expands in mentioned space historically Communication footprint that opportunity dollar Australian a about domestic very our Military a the business, predominantly we're international Satellite excited multi-billion Jim U.S.-based As the which and

years. themselves, over in that a is present us for the of was a absolutely five there and front opportunities continue us more these driver growth lot to So opportunity next

I background And some there. Jay's remarks could add Yes. to more

will. if notion but as game satellite is a there's of is this, catching be for that. and As U.K. sovereign Australia into space. like an and like military has that they into upgrade think already you countries that, incredible national we'll for want there'll on system mentioned, getting the a defense to amount of communication replace the in well options and space, upside, and these I for independent Middle-East elsewhere look

and every side, years competition I fifth-generation far as Aero F-XX the on popular is as the On the think been few aircraft fighter over Meaningful competition. last go. incredibly

to matter We're in. with build enough try as in them addition us to lot it's Hawk. that that various us versions get production success with there. additional F-XX, well India example helicopter going the RMS order the compete is to coming that a demanding and In able rate to of can having to of a to of for fast being international is get the requesting orders we Black of the and and SEAHAWK

mentioned, those. more exportable we becoming as Europe As that. demand there Australia is and part are as forward Also we both radar in the and for go systems Asia of

be closer mix. Javelin, ultimately are and LRASM And potentially then MFC, to at the obviously PAC-X for JASSM GMLRS, going in somewhere allies

process international wide across through So, take we'll the there's our demand FMS years. areas, a business a broad range that some of seeing few the that time. does Contracting all significant and over next be

On programs, this be a but the other and few other government be and programs -- largely it's lot updating you hand, is it’s there broad traction. FMS. to last on projects, going of we'll getting controlled a are going international there'll more the and a be range, many continue export to DCS continue years, be by U.S. But let's start to to for

Walton Research. from Please from ahead. go The question Wolfe next is Myles

programmatic, FLRAA Thanks. made. extra Sikorsky the couple on anticipate Maybe XXX year. also guess in rest RMS, decision now Is the morning. in the with could the a you to talk good that run-rate basis I of to And of at is that that, something points for implied on Anything about Thanks, driver to the do associated guidance? the margin there R&D needing implied expansion you maintain was competitiveness? FLRAA?

on your XX% was their was lowest year. for of first know, MFC. What the nearly This margins, you of quarter got year. RMS We've Myles, the opposite a of of guide is quarter property happens adjustment So, the the little a bit again XX%. question on first

based grow and the risk to that -- the expect balance just and for the foresee We reference. on year that step-up program and just to the give frame you that schedules we will so of retirements a

their about quarter were first The profit. step-ups of XX% their

adjustments profit we're for be that for full-year to For the XX% for RMS. the expecting full-year, to closer

be the that So in contributor will profitability. to a increase big

we The of a up have will also boost just in that their margin sales second margins. higher some we to element that some is give year, attracts pass the mix, the have sales which second-half

at what's RMS. fundamentally that's happening So

at million fourth Sikorsky to part the in impacts about as -- reduction was program and quarter As cost of we fourth announced had in far in Sikorsky, taken RMS a that to charges win cost-reduction of a $XXX about competitiveness. any related of the FLRAA, had maybe cost few quarter, related half charges and

-- so, steps again and sorry particularly slightly significant in we're stepping growth actually production, up have program our here XXXX, where in that on XXXX down it just we've program. expecting the double we Hawk have in we XXXX, And then an the deliveries CH-XX interesting ‘XX there got dynamic Black to I'm that in in on while

And so, a would say. we're a of just year-type trough dealing with one I

Stephanie and cost team, of team growth in the for same future. the are job capability we us structure time rightsizing I today, a at provide maintaining have think while the the done where her the nice Hill to

Matt The go next the is Please of ahead. Wells Akers from Fargo Securities. question from line

in to the some about question. remarks about control, in of, should you going programs sort of, there think When terms to Growth the sales needed this support and talked Hey, we opening now. about there? flattish procurement some that ask transitioning business then of scaling about, fire any mid-single-digit. I good I for think morning, wanted guys. up Thanks of on investment was from, year? made you've missiles capacity the comments your also kind and multi-year

Yes.

are sure the in own capacity the investments. delivery a programs the invested capability proposed as and is strongest we'll request beyond planning mean, the that I can years when certainly when front Yes, We've certainly and more there the that strategic our for So, summer capacity investments. in requirements deliver where to we funding bit we've five and on some example. the we MFC, our money’s through little got XXXX you, and mentioned call. being at October I do over get in kind grower, asking they're process go good in look is out PAC-X for. our Jim we to we that to specifics you lay of Presidential a of But a maybe for facilitation give strongest make budget next first also a other are funding few requirements of, that look customers our grower.

over And well. talked so, and We've ‘XX in some of I We beat between again, different ‘XX, we've that these in over enable growth is good really think few the to and now the years next a levels investment there. help capacity going levels reached capacity next ‘XX. few got as increase years. about And that

what Matt. details give talking it's could here. Jim, some And Yes. exactly we're on you about I

XXXX. for planning XXXX government and investments to capacity by So make we're us PAC-X is with the and to this XXX XXX with to coordinate working on

we'll go So discussed just from the with And then now, Javelin, years widely pretty three the which been XXX. in similar to XXX from past. has

capacity was ultimately, get to year by is munition, comes and HIMARS about we're was XXXX. going by to When taking X,XXX. which XX,XXX. to have plus, a to XXXX, capacity XXXX year we'll X,XXX original it Our and X,XXX We're the last GMLRS, XX,XXX the that

where time we it. own that for go doing because with we're the think programing, with have capacity point and that So do guess strong their customers these with you And a I government we working meaningful what to now step-ups, we're in U.S. and those, -- fill priorities. in call really and to them demand are capacity which could along

that. the own the to with CapEx our funds munitions get are drive want got high-importance answer fragility triple plan as see, by of take plus and came do to a either to a strong other asked production into the investment double MFC. plan the anti-fragility We we've making to facilities munitions going We production or the government, back, So, program system. think sort of a it's to and and systems. pretty three years production business an of at significant you rates we grow certain to case, out and There's got them of because our through I lot committed

the are happens months you time now years improvement that's of this instead meaningful parts in to implementing. three the if they long-lead ever with [Indiscernible] now So get and again, and see in the it's multi-years capacity the acting how that six a government

you. Thank

line next of question with Citigroup. Jason the Your is Gursky Please ahead. go from

keeping a more need you then about Jim, commentary awards is question to kind for year and what and timing support one. return the Book important? question, have strategic those ‘XX do to growth Jay, the you to of in book-to-bill Book keeping of this

the the later made I'm and Evolve Organization supporting to then on have the bit just Crescent going And that Jim, initiative you and for little double-click with announcement recently communications. a you here

the capital into what picture of you're capital kind putting perspective, Just be Evolve of a this putting from going you're big into over organization like anticipating, initiative an and that Crescent kind curious to time?

for us essentially, or it's with at year, to in So be book let one it's effectively, we ended growth book-to-bill book-to-bill start up resume for -- question. that $XXX a Jason, Last a to around we're $X maybe up billion. me sets But just the the billion This XXXX. the backlog one. year, down the $X planning case billion.

grow for where to and right from don't it drive in XXXX. XXXX. need now, ended where planning that to is we So, to or see the that's we're the to opportunity be where for to need generally we But resumption There we backlog. in flattish growth landed necessarily are, we and be

into put for not the that strategic Crescent me that's initiatives take so, do and that of U.S. we're of to that production first just with company our just and but the let fragility strategy. industry and Martin, of describe that Jason, context ways and give you Evolve to the provide the government for government Lockheed some notion is endeavoring And the main accompany that We've strategy driving. system, and way. got we just for the that I whole One mentioned, overall the three we're just

companies to companies Martin weapons, at of can tech a sized may that they to supply laser-guided current Lockheed corporations. Microsoft to variety work have wider us before advanced most chains and the our supply to XXst we is, in Digital Century The Newtonian five defense business heard from one and sector we primes means beyond with that Technologies with second Security and latest doing International is the and chain not about you've talk that and be be bring Defense the startups working

XXst and Security to collaborate So, to Century deliver with be we much of company partners to our structuring are and cooperate able broader participate range this that concept.

Evolve had. so, we what already is to complement meant And

type that promising We core business. technology with deals have that for are Lockheed that a have Martin a ventures Ventures group, our start-ups

On to prime, five big defense the with so other side, partnerships and and speak. we our arrangements have agreements

Northrop peer sector BA like to something aircraft and really and companies the But companies of history together we don't F-XX our the technology many, and Lockheed have traditional work with with to middle Martin, are group. example was mid-sized a on needed what work with So, those. the ways many work in Grumman, us that in for in there us companies

ventures, And capabilities be sphere commercial is for companies arrangements to large with outside normal and joint and national co-investments, to so, able space meant defense. for on now deliver new exploration to our do mid-sized to Evolve so also of speak,

to everything to business we’ll the Martin and the how with is lunar of then to implement on figure service from that the surface how to present sustain right so, transportation finance basically outside Lockheed to for And Uber others out and the on the work navigation for will to how day, lunar communications that and and at on you moon, the operate positioning so with around you can moon, have to surface actually with orbit robotics systems you either the the need or end that the of humans. if

of more It that capital just that do So The business sourced, will back come right? of our outside will [Indiscernible] and deploy will acquisition may not has source, creatively the to regulations. our goes -- NASA the we may into will not out it contribute, that be build going partners independently that. federal rate type they be designed contribute be directly, to DoD but the structure statement will the It's rates, to or to right? disclosure we

also overtime, get can the and more and we investments partner full to do finance them that of -- those So others creatively with creative benefit that.

grow statement it doing to we the without of burdening necessarily it CapEx the the that's to why that and company. intend that's So concept we're and ramifications disclosure

at all breaking business within have by And and to agility them to procedures multi that policies be working wouldn't really we business it pursuits says bureaucratic with these business probably a of speed It the the level. ideas in we our in enables areas operate have. otherwise these the structure area, and -- out the that available structure

others And flexibility by a operate so, give well. Jim as we mentioned, some little pursue more ability And with as co-investment to speed. to the bit them

the ahead. is of The question go from Deuschle next Credit from Please line Scott Suisse.

billion So Hey, then were And I QX. of adjust periods? basically $XX.X get QX space you've reporting guidance go good for increased $XX.X Jay, if segment just around to in number based-off through versus midpoint morning. sales year QX guided. model And of space future sales to weeks billion? systems those XX% for what higher the of the than

prevents comment So, you. on quarter? you the way, what from to upside of of relative that what or curious if happening type ask to Thank headwinds the case and year another first the remainder volume are the

be Gen mentioned And Next also in programs I remarks, Orion, would programs they and Interceptor You mentioned little it's to protect expecting as comms -- programs there boosted, we're ballistic growth and bit that missiles. more fleet was some expect. steady Scott. my growth state. some Those National had a protected Classified But are that excellent from Space, areas know, you question, good it's a Security I

they were program so some from And in just here they just quarter. benefited -- timing the

XX% in We're much in XX% that pretty in expecting give be flat that about of the year. the expecting all comms to in quarter Orion up FBM generally We're first just full-years’ that up quarter. protected was was the year. the And worth growth to an and the generally for you the XX% to is quarter. quarter. example, up flat for was be the

these came the And really growth together quarter, that all caused of XX%. this in so here first things just

We expect in the normalize the to of mentioned year. this program really balance that I just

anywhere their We million these some other is probably probably growth billion today. $XXX $X are sales, to will not on $XXX to we programs. between nearly upside continue there to talking million will acknowledge I some to see some it's of of where you're that upside but

with Shapiro from is line question Research. George go Next of Please Shapiro the ahead.

were of a beat to this anyway. numbers, relative actually wanted other expectation I the my they these large quarter Jay, because pursue some of income to Yes. big part

net that's other the was at look you it income, if operating million. $X So in

guide million year. the the $X.XX You minus kept for at

negative what that abnormally So all plus there is happens it's subsequent quarters? XXX quarter some the or in It's high?

And other then $XX somewhat less, income but was non-operating million.

$XX $XX deferred million. adjustment. I $XX net stuff, that was venture the which out the other And disclosed million number, left the of in was You other million for the what compensation was

Okay.

me George, a -- Let so question. fair

of for tackle question what of big happens year. in Just picture big -- the the the may you to a question, balance terms

on that the so the we Just update it halfway see. saw about the make that on because quarter, imply, that. the balance We'll gains, we're reversing call changing a talked give that through $X.XX of the investment update We and being more in we're the we'll implies that second year in not year, obviously an quarter.

of corporate we speaking little as investment have The a our of we through. costs bit those investments LM well. in some balance just of element other that increasing the then flowing terms about the in Evolve, were we have year just in And there's residual

And an update throughout we'll we'll are those year see where things at rest think so to are make point assessment through upside, the that and those all there's we just make in the things year an of Again, halfway whether the on the not. extent time. those We'll monitor allocated. I or

go next Capital The from RBC ahead. is Please question Ken Markets. from Herbert

and little wanted F-XX you TRX the Jim, on the morning. see I granularity can Hi, good if a to provide Jay or more program.

is Specifically, on back how impacting see headwinds of that of delays is deliveries like faced and that and implementation. it But in track? getting do ongoing program and how timing that year terms you that adoption this seems other in

round, innings we're is capability is to node late really greater the Yes, and really Ken, edge system. in Refresh an it true it of much, the us critical The gives construct make compute of it’s very Jim. in that Internet F-XX X. of In Things architecture, this much Tech it a the implementing fully a point open

you're right, are enterprise a to to board storage whatever XG get onboard, so the vehicle, compute processing data the is. of finding ability system three cloud back as data on edge elements the And a multipath node in to the cloud, vehicle, the

all upgrade pretty that. TRX provides together is leading them and for which components it's number and of subcomponents, I'll It's aerospace call done. of edge the to a being the intricate, of coming industry And accomplish fairly

to late delays test some or we're will work we of or We're at system, of up test getting ready see define et the are. October cetera. We've innings that's the those some literally when been right And very the exactly has by now. this factory, there and So is we're really to government all results hardware what to that all everybody together. the our got software But implement now in December in loads, and flight software. and and with where in in go in production wrap the

consider rate extremely the aircraft the degree demand difficulty I to we're right. from dive can joint really, and So set And we're for make and And we're of, that's our working in program that done the both Block sure this that up and we it's closely and international successful. going with are office would what make of so high that prove to we blossom XX, the define here U.S. kind lately. seeing to customers

we're So shape I program. on good in think the

All this right. Maria. is Lois,

to come top the the I think we've hour. of

Jim to going any for just I'm thoughts. it turn back quickly to final So

Thanks, Maria.

Digital thank and will say XXX,XXX I'd win As for at Martin Technologies providing if deter we that conclude, like to. to XXst and our Lockheed their commitment them Physical here have conflict to to help you Century our the they is employees

today. speaking Lois, for you to July. look call us And We all that in next on call you today. again joining thank our forward with earnings our So concludes

for and and ladies does our that conference using And Thank conclude service. today. participation you. your you Thank gentlemen, AT&T teleconference for for

may You disconnect. now