Lockheed Martin (LMT) 23 Apr 242024 Q1 Earnings call transcript

Good day, and welcome, everyone, to the Lockheed Martin First Quarter 2024 Earnings Results Conference Call. Today's call is being recorded. [Operator Instructions] At this time, for opening remarks and introduction, I would like to turn the call over to Maria Ricciardone, Vice President, Treasurer and Investor Relations. Please go ahead.

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

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

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

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

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

Maria. our state Department thank with joining brief updates first about detailed support of digital on our status today's results, financial technologies. call. more you Jay XXXX and some our budget, Then U.S. Security provide to on recent integrates a highlights morning, to and information and earnings Thanks, us latest the quarter Defense Maria financials. vision key discussion Century I'd advancements overview made programs that for of like everyone, of the XXst quarterly and the quarterly Good begin of will

the our a production technologies. inside wide range outside design here invest to of Martin and while against to allies. with U.S. against partnering essential companies capabilities makes continuing deter further to capabilities and industry and aggressive leading to for A&D in our environment geopolitical strengthen The defend increasingly unstable today actively are world and to it industry improve heavily at nation's government Lockheed our incorporate We behavior the and the

a result, missions of technology delivered billion, call. across reinforce achieve alignment growth ability maintained first reflecting and robust backlog robust our full key And financial we our in the expectations advanced year These confidence we shared earnings priorities. a As results $XXX quarter customers' our we our the revenue to solutions and most the in company. between recent

for for Black Moreover, FY consistent activities with positives in the classified the too. Hawk, budget Defense as multiyear include investment support missile, and continued many National heavy munitions Strategy and Lockheed such approved reflected lift ballistic CH-XXK funding robust hypersonics defense programs 'XX Highlights for helicopter, F-XX. priorities, procurement, ongoing and Martin, C-XXX fleet

support also programs, including well hypersonic PrSM, and programs CH-XXK, munitions and such in as as hypersonic strike these F-XX, PAC-X LRASM, emphasis weapon. others continued original advanced and including are additions many to process, and The very F-XX combat budget early request still same aircraft, in rescue submission, the the for budget GMLRS the and UH-XXM major FY on There prompt helicopters. while Javelin, 'XX, long-range addition JASSM the C-XXXs of initial of conventional as to

and to next-generation and Israel a for address security support, is addition In Senate. passed In moment. Indo-Pacific the I'll getting supplementals week, billion Ukraine, of that, consideration Interceptor the which the $XX currently funding more this House under in in is

strong confidence a years further us and our company, next over requests budget presidential 'XX for FY additive our underpinning long-range the funding growth for expect several future supplemental plan. We will in provide giving

most level. Jay involved. personally our also is programs, and programs directly essential While in demand stays significant of safety, for it remains executive my highest On and are at team elevated, that quality, performance terms senior gets I, these cost and program and key our schedule the

sustainment. data and execution of bringing implement the And new in will further we our fully ensure customers not On the focused its all to resources F-XX, company only core display they allies. F-XX storage will suppliers everybody but to and TR-X production relevant U.S. aircraft program operations and the the on unit that fighter the based domain for the most These air our as effective closely that and on to we and collaborating of and are abilities is that with development, world, domain capabilities pilot processor, the its remain advance the in is capabilities terms getting. also across capable forward concurrent quarterback act looking joint

of expect in improvement delivering capabilities testing aircraft training-capable approximately flight with few this including of from quarter the We're XXXX. encouraged and fully combat we program. a in of towards months to system TR-X by now be in software in this capable system and the prior as then to a regard solid over on resuming timeline test mission training Flight expected the stability first the system versions our transition is test advance aircraft maturing on capabilities last with TR-X configuration results we're to support path the XX% towards and underway, to the deliveries, configuration. aircraft combat third made date progress combat-capable The we

Block software X there beyond. and to over planned, As be support will further program capability continual updates insertions the

between an jets our to way. for expect deliveries the the While hardware production of quarter, suppliers receipt range from timely and there which in maintaining first delivery final rate of aircraft were XXXX requires XX and necessary TR-X the XXX, along no continue we're F-XX

to F-XX to the procure of continue demand a F-XXs. XX and signed official aircraft The making acceptance, with join to letter XXth the capabilities intent its too. quarter, team F-XX's internationally, the combat offer and for Republic it In the global advanced create interoperability the nation strong Czech became

Department XX approved potential up which F-XXAs And a to to previously for complement intent In purchase sale military has XX U.S. already to its the the State Greece announced Singapore addition, to foreign F-XXBs F-XXs. it to committed. X

delivering of aviation reliable the our customers. capabilities the Heavy disappointed program, the is future remains funded FARA, attack Lift Also domestic billion aircraft in in and committed domain, and cancellation by foundation while to multiyear $XX helicopter lower outlook reconnaissance of global or more bolstered program, air expected a the growth innovative to stable. strong we're CH-XXK backlog, in than With in and Sikorsky Sikorsky's

also and encouraged that as Martin's Lockheed Army's air things in modernization as the We're to address Hawk leverage upgrades commitment cetera. such Black portfolio ability well solutions gaps of by AI, domain, capability as production to et our the lower renewed mission with autonomy, broad

missile to which than defense world recent becoming more events given Turning now ever. are critical missions,

to capability MDA, We or industry. the the the United Martin which or to Missile Agency, Lockheed Defense is called the Interceptor lead selected continue States, new deliver week, Last NGI. next-generation missile defense for the homeland

of and As system. embrace provide LMX, contractor, Interceptor processes This One modern, reliable meaning digital our was a program. engineering, the start MDA's transformation, and program of Lockheed prime the we model-based NGI tools, advanced the the digital born program, very Martin very, history technically technologies in that's will digital from this most this

homeland its in their Now critical off We select as weapon schedule proud capability it broader MDA's tests, so because to path on with far even front review, down before on system a early it this. Martin enabled I'm were flight start. essential to integration defense the was all of and design team get fast Lockheed of this continues to we're that the

operational completed acceptance that Defense an country. Missile to handed baseline over Earlier final to Agency and to radar was this the officially defend quarter, decision. for or final help active is the preparation radar, LRDR, And long-range transition service means for capability in discrimination what the that

defense. system and both asset cutting-edge The look sense the LRDR a incoming what like low- add incremental enabling such location approach, and to discriminate up and attack might is track of an capabilities and This prime customer in respond providing national as open to located the high-frequency we any with where benefits the hypersonic can early to search, it. is radars missiles Alaska

elevated an that like though really of any kind attack does that. What deterrent to is create

really that LRDR to great online. it's about ready So go

and control system both overall battle architecture communications going mission. Homeland it be they're will integrated management elements or into a as CXBMC. and Now the And be the battle broader military that NGI Defense we the management with to calls defense call command LRDR critical within

missiles to the radars, defend be So system used the to us to allow that's that's going and the country. integrate the

space which will just a enhance In domain billion the $X defense. to in before, contract improve spoke and expand the to Under contract, this our selected continue for leadership data integration, MDA, threats these global ago. and Martin picture the most for potential April, with levels demonstrating, I about of position incoming and all follow-on connectivity a of XX-year, never we'll complete CXBMC modernize sensor next-generation again, was to battle minute homeland that fusion as Lockheed management capabilities create system's systems awareness done optimize

to and solution through Security Martin Intel tech, the our of Separately, with example, to Office commercial will transition the program support we Defense we defense. work continue of Lockheed across support or advanced microprocessor just with to Citing Research also packaging industries the for partners the telecom, one the for Engineering. microelectronics Undersecretary for XXst Century staff and announced national simulated advance collaboration strategic other

a in high-performance, U.S.-built SAC-related chip This systems' semiconductors. revolutionary collaboration will leap provide defense using capabilities

with latest Intel MH-XX our helicopter through architecture to the complete system next Martin the and ultimately we'll technology implement, U.S. test months, Romeo the XX semiconductors open Navy's sensor with program. Lockheed Over integrate production intent

financial more commentary highlights turn our now additional Jay I'll to results. for it over Jay? and some on

on the touch additional to close I'll the I'll out by highlights area. Jim. some Thanks, and then will outlook And before back Maria, results business handing the who off the cover discuss to quarterly discuss financials it and remarks. consolidated come

to Starting with strong start had We Chart the year. X. a

$XX.X led sales year-over-year of increased MFC First RMS. quarter and billion XX% by

year-over-year While to from calendar growth compared normalized X%. solid week was an extra the sales benefited a results XXXX,

improving supply throughput, labor strong saw material of indicative We and an chain.

engagement locations. closely enhance expand performance to depth and quality supplier continue as and supply to and We chain of partners work at proactively the our needed, with breadth our

loss Segment billion with and included program operating million the associated margins MFC. X% profit XX.X% of $XXX anticipated forward year-over-year, the up at was missile reach classified up with $X.X

were year-over-year Lockheed XX.X% adjustments. Martin primarily lower profit reflecting Excluding margins this charge, segment

were record X% share count security interest backlog from in including gains. by were SDA and tracking share Book-to-bill offset higher of classified X.X layer first GAAP quarter more just several booked of $X.XX the earnings at per $XX profit and ratio of national quarter, lower Space. in year-over-year mark-to-market book-to-bill and benefits down pension a other expense, as lower large than and was below to contributing billion income awards, X. higher orders the Notably, significant Space

repurchases after We and through $X generated in dividend. cash our Share flow returned investing million $XXX of free in research capital expenditures. quarter billion, million were $XXX $XXX million in billion and the we $X.X and development

quarter. highlights additional to over in Shifting the

with program. the pleased the F-XX progress are We making we on are

XX Block XX Carolina varied F-XX Greenville, stages additional Block date, To Martin production various jets jets March. Bahrain F-XX X with from for testing. produced in in first has of South The XX Bahrain to and Lockheed X

the We Defense, Slovakia's also Minister aircraft presented first underscoring Block X the deepening Deputy Prime between XX the of X countries. to partnership and F-XX Minister

the history long relationship Force. addition, related Turkish notified of Turkiye. of of Department upgrades State on The builds latest our In and the authorization deal to support and F-XXs Congress XX sale Air and with

are for Turkiye. the affordable Security package Viper and with Block XXst life XX We operating upgrade advanced Century costs capabilities F-XX and confident provide cycle

advanced to achieved test. unitary our demonstrating systems rocket first ER success In multiple a longer in variant fired production. operational filed of system, and continue also range capability. for launcher, GMLRS February, warhead We variants extended upgrade to HIMARS U.S. the its GMLRS, precision closer with the X range weapon guided Army ER in capability U.S., The standoff launch

demand for missiles. Precision allow quantities U.S. increase as operating Strike in surface Martin PrSM. production Lockheed to Missiles, long-range This The also contract a fourth early for the will known production for Army significant Army award meet awarded capability

And hypersonics. the

Following of revolutionary the we with the flight or recent end-to-end test Weapon, confidence completed full capabilities. in Rapid program Air-Launched Response test, ARRW, the its

performance occasions. have demonstrated around all end-to-end successful We up on multiple

the with Martin hypersonic quickly the solution be deployed hypersonic qualified, earliest I'm can military. deliver and supersonic behind assets to sorry. production-ready U.S. fully strike prepared solution, the is Lockheed additional And air-launched, provides operational U.S. rapidly that to lead ARRW -- tactical,

the in Both programs. the land solutions as weapon also prompt to strike sea we towards long-range progress year milestones domains ahead hypersonic through a and conventional advance full and We capability continue have operational strike hypersonic capability.

defense quarter the test arena, intercepted the System medium-range missile reliability missile of test a employed to Shifting one executed integrated first and defense the system and air evolving most complicated missile Weapon operate ballistic in successfully environment, latest and of Aegis when system system. the and updates in the The the ballistic the tracked we're multiple to to decoys. constantly Aegis dynamic threat demonstrates amidst the Aegis a

integrate systems. to with on quarter, This to further our engagements PAC-X and our made the enable for capability combat-proven expand of progress affordable capability mission we IAMD efforts an maritime

I'll pause Maria business to over to and the turn it cover let here, areas. me

starting Today, results on Chart Jay. Aeronautics will Thanks, Okay. the first year-over-year quarter areas, I for with business discuss X.

at First F-XX the were F-XX year-over-year, was X% due primarily program. billion, extra and up Aero XXXX. higher in quarter and week Works ramp $X.X X% to that's continued Skunk normalized sales the and increase the across on volumes over The production for

Segment beyond. profit XXXX higher volume healthy includes XX C-XXXJs year-over-year and F-XXs, being remains lower by XXX adjustments margin operating F-XXs, into mainly contract at and Aeronautics lower is growth offset on the XXX F-XX. comparable and with mix which a backlog net development $XX billion, profit supporting

programs, and production by missile defense JASSM from GMLRS, PAC-X on Turning and prior Control also higher on Integrated THAAD. to extra Missiles and volume primarily and increased HIMARS year, and XX% saw Fire tactical air the normalized LRASM. Chart the strike for driven X. XX% and week ramps Sales on missile

operating expected, primarily decreased on Normalizing have the classified Jay profit to loss, margins the million segment would due As been XX.X%. year-over-year mentioned for XX% loss the MFC's program $XXX previously.

'XX. XX,XXX Now launchers, currently capacity growing next for to missiles, XXX JASSM XXX by by PAC-X production growing to XXX at And in XXXX to to plans currently programs. missiles, at by about to annual at is I'd XX provide growing LRASM and XX,XXX currently is missiles, on our and XXXX. at quick X,XXX update like year. HIMARS a XXXX. key growing currently XX XXX GMLRS

SEAHAWK volume profit CH-XXK X. by sensors in increased Sikorsky. quarter, Operating XX% systems within and due the Rotary Sales radar integrated higher to warfare higher including favorable for offset the and week the and and partially lower within on increased Systems extra X% various normalized by and profit within mix, the contract Chart programs entire and to programs across Mission CXISR volume laser portfolio, driven adjustments. programs Shifting XX%

hypersonic tracking space. extra on Agency Finally, year-over-year, driven missile within week on normalized was $X.X X% XX% with The ramp-ups the security as programs defense volume transport for Space approximately well the on and on and increased as Space growth ballistic volume higher layer Interceptor Chart X. billion. Sales and to by program programs Development missile next-generation national within strategic higher and fleet

adjustments offset increased XX% profit earnings, driven volume the lower net compared primarily OPIR by QX on Operating to equity by XXXX next-gen partially higher and program. profit ULA

up back our remarks. it to turn I'll Now Jay to wrap prepared

Maria. Thanks,

to the on outlook turn X. Let's Chart

results consolidated Martin's Lockheed Our XXXX remain achieve expectations us said outlook with from year well the what the we unchanged January financial for outlook. in strong positioning full first to quarter

of share and We free continue billion, to to in investments including dividend, mid-single-digit the support along term. flow and the per flow $X.X be of $X our development longer $X to independent $X over the billion billion a to with expect of targeting capital expected repurchases, research growth while range billion over share cash shareholders, cash free the return

to XXXX towards commitments and solid laser-focused to execution XX. building out full programmatic delivering our a on guidance. All customer on year while start and close remain off We're momentum and Chart right, to our summarize in

LMX and customers the for Century automations people we depth combine portfolio enhance to our capabilities our internal and key transformation, XXst dedication value Through for Security increase captures processes solutions by with the create and velocity, and drive continue the our programs. LMX breadth our are and needed reengineering our shareholders. to to One drive will our of efficiency, of expertise enable us One and to providing

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

Doug Harned the from [Operator question Bernstein. is Instructions] line from Our first of

to with good start TR-X. right make F-XX of a to sure Great. like understanding I'd now have we the

it deal just Air point And that back slippage last looks moved said, over like the you timeline the this as QX. great the in talked a years. about well, some there's timeline's been to Force and has As in few of

been has has budget avoid extensively X X to in and Block do the Block new 'XX upgrades. XXXX cut later and to delayed, having deliveries

and production can payments and to off. in able been how you've mean, confident I But the we get up, Now although deliveries keep are revenues cash trajectory?

look you over Jim, and would a production what for and negative and could the what scenario revenue cash it mean talk positive perhaps, or more might for X like And maybe next trajectory. years the deliveries about

Doug. Sure,

like it's important we're time. same and then Most and advancing production to think the concurrent I at what go programs capability that sustainment through doing, development said understand base I then a as look the supposed all So as complex a earlier, to of off of it's these the well and period of and how run engineered base development is production of going design largely to perform. that or that aircraft

the years been a it's day has F-XX started the ago, going since today. different development going and The is on on that in years sense and program

Now function another F-XX's increases capacity service and extended to that few is news a And that, the the X, was. capability came or aircraft good you life do government decade and about think the as I of result just it expected every the of have years. step out the

difficult it's is an to that's we're we schedule. schedule, to a We're and -- me responsibility the cost thing and do the let to hold OEM, good say, just our and okay. predict this we're thing, but variables, It's extremely control But still don't responsible. So also and even still all right?

run just integrating I'd devices, integrating is we're company and and is executing and all a the step doing say, that. complexity of components, dramatic. on And What TR-X pretty, into level series is of our function software the what novel so increase a at we team or managing of that's

than our what's the of happening the new out taken through team And other are longer all predicted. into so And the software it hardware integrating aircraft and all ringing now is all that's we systems.

we a of stage, training also regional Doug. Release release government, X a and that them this pools these get X, of at everything you on will. spare we're jets confidence with if can X, pilots in of and training getting along operational we're aircraft, got commanders else wing is the their start shape, you The combat you can it get training-capable it and is in going a in if think meaning parts and U.S. and of hands and bases the so we've think a of organizations release that that maintenance lot way and squadron, calling, their way, the what sort their as they infrastructure if to

load final months, TR-X jet Once we be have to training, and aircraft into software And version out get the bringing next you'll actually the in patterns fly those combat the could then the deployed of operational the few combat-capable on sometime for the how They're and procedures fully combat. the actual maintenance. operations.

So the I'd and? we're confident to the say we're this say deliverable will on training-capable And those schedule in sooner, anything combat to to do Jay, want you able we'd do highly so cash third based be be test quarter. but else aircraft, that on. the about like it the is for far results flow

sure. just Doug, Yes, add. I'll

-- mentioned, the decreasing Jim to training of parked. new As Jim and as standing of and squadron configuration, capable up the amount squadrons mentioned, aircraft are supports combat capability this that training the the time

does All of type really any avoids that disruption. what -- that is significant

keep XXXX on what well. And our this beyond and does as track here is so then in really production

referenced of would can these an have inserted. is what of And and from insertion that's you the an so you have As further heard, by XXXX, capability Block that well. really that as avoid can executable a military, Jim may we mentioned, X plan schedule comments And made type provided industry types start we'll actually in reimagined. U.S. And and disruptions. delivering inserting capability Block entail X we'll tied be discussed to they've

then there it contract longer the working in wants track make the And through standpoint. But around production And in can keep Lot on the if the but customer in Yes. medium an able think we're that, when cash and schedule. XX so XX on that sure in be a at we executable look coordination short capabilities to could pressure to flow? profitability movement term, the potential the with from to our I deliver program we on be customer you term, we're term, do should think able over the

is question Barclays. -- Barclays from next Our Peter sorry, from Strauss Strauss I'm from David

like to supplemental. budget. 'XX since we have get So QX, going looks a It we're very large a

guide change in of You won all fall the those revenue kind you're kind where single-digit 'XX to level? of for accelerate and growth the How together year this thinking potential things NGI. off you how this might in low revenue about

off mentioned an pretty first X.X%. and is with Well, guidance well range, David, on as which apples-to-apples solid, range to say, pretty high the X% being, quarter a of basis, for X% we midpoint this end lines we started around just the up in growth X.X% quarter, that

So we're on deliver expectation. to that well positioned

of sales last towards to similar possible see the could range there. is we higher upside It year that guide some the end

good So start enables again, that. that really

XXXX, about think confidence you the growth -- we'll that we We talked giving earlier a that confidence us higher seeing not XXXX. year gives in we more about more, here growth same, As accelerating us than what in what had at in if saw the budget, least the starting in and XXXX, in in grow. see XXXX we're anticipated, supplemental to we'll originally continue then

in our to, this of sustained we've bodes growth 'XX, But only well. -- a right give all 'XX now, not as seeing. but well of update driving in We'll better what in later year, terms to beyond been in what we'll give we're much the you terms you

from is line Peter question next The of Baird. the Arment from

kind this in can the talk Missiles line. of your confidence given margin maybe On And the the guidance certainly top margin in lowest Fire classified inflecting to we Control, we've seen many and was know that just about performance years. losses the continue. supposed But you've XQ year, the expected to are got you for

production in the I smaller -- just and do the just all out called losses think classified? the increases Maria get

on give because see going we you could profile higher to the of the forward. color on Maybe your volume? if are expectations just going some market just of offsets Or more kind performance

factors. of was a MFC Sure, little X light because Peter.

mentioned, provision have we did that recorded. we we loss million $XXX as the First,

their were that, lighter $XX In by profit about addition million. year-over-year to adjustments

calendarization. -- getting rest improve we function year a really see adjustments to. what the profit that's to the so in And of back guided throughout of us We'll the had and so

Just -- a associated we back the for or have MFC that in have -- that could anticipated of anticipating half this we're and would additional year with classified program. as in the reminder, fully our was guidance additional losses

And so year, $XXX our from million, be what today, back expectation. it in provided guide, what are would the $XXX implies in is range recorded another we half where the of which of million we the for in this

as going deal And Now possible that, the this, we've terms about in depending here beyond the timing talked other such on discussions as visibility can through with upfront with I'll so technical funding achievement factors on. -- the to XXXX visibility question that balance record the funding. and in the just year year, goes additional could to customers, milestone of of it's our factors change. we There's losses

a recognize those into go earlier. you determination So whether have to and all the loss of factors

this which our XX-Q on see in coming potential excess additional program, ranged we've out be losses that in actually $X billion. of in -- would You'll the losses excess

an to it. So at can have size you least opportunity

and you full apart back is timing going to for our about year, still balance got guide in guide. year. mean, XXX. their impact impact the at year million of What losses of I basis which for in of take amount points the XXX The really the at of $XXX total their be the And in year the if that guide offsetting least anticipated, is alone. $XXX of to of their embedded expectation, this a that determined, we've is about down the MFC -- million they're fair

expect has underlying within their entirely offsetting but And to not It's so seeing continue. you're MFC. we solid, been and one-for-one, performance improvement that

I classified it's will being orders assure Jim. and these legs. years, and used And to be very, developed believe, here very we capability MFC of many fly going to can have long I to program the USAF, many, follow. at for There's that a Peter, the aircraft you that's

couple the maybe of going the we're the the positive. area to that quarter, absorb for it's So going I years, significantly look a you year, cycle, the provisions for to think under yes, But for Jay a in curve life described. loss be if for

to going very we efficiently a I that is This as franchise support program get to the run there long want long U.S. time. so government we And is think as for can. a

Right.

timing progress and as also it -- to can going I think to We Jim And it's that are of I the lot in losses the a to program to and where about time spent it. just in of spend mind. strong magnitude we going of internally of like lot we important talking a through things of business But for keep the the well that at many our of the years business provide case accretive you mentioned, assure above it's is case. a as cost And capital. come. as returns time

from Akers Matt from Wells is question next Fargo. Our

I just we we've of ahead questions of win. able sort a the on of also some how I industry. that seen were ask And contract to this, expected. couple one, always get on charges a original down the select next-gen in happen big you when then the guess to potential wanted Interceptor win, because think, whenever there's I was like

got there your correctly. size that just cost you've So the confidence of sort

we've a about from company the company down bet to made all this government say, X digital way the model-based the from going take So that's acceptance ago years the years got that to and And program road. and system. years engineering the whole okay, transformation to is sustainment a requirements,

X-dimensional, implement program to picked out for no about this to to It's the the try this sustainment legacy company entire to convert, to are right? figure Pathfinder programs old we blueprints there's billion, to to way, because now. XX-year by convert of engineering, production X- and C-XXX a before. no is $X And other to which something, There's scoped right how make doing and the programs operation. a model-based we NGI one was

they But and because could sharing off XD, were cost and able to of with ultimately, start by fast it accelerate proposal, we the we the from it. technologies, these Right everything thereby CAD using data and the NGI else the get in this could to digital tools. using on and that and And fashion, we development the in the government contain production, were was digital too, the category. these schedule receive born

were players out There this. X original early. dropped fairly One in

this -- phase, in and we was schedule. we're of second select. will, The And you of go final were kind proposal our just provided ready if to of ahead down

The of costs But kind to ability that. demonstrate my was decision to because early, then time, of and you to the other I we our on over won will. a manageable also. a knowledge, provided And think our make able proposal won speed player, based if government and

Jay I about more us assure is what to can let bottom dive I'll you this financials, did process require of bid on not but the the cost. talk to

do it Jay, you take want to from there? So

Sure.

we're already critical review September well that a Just assets. in test We've and continue. of currently review will contract as We've this a as the building under talked design design contract, XXXX. about and performing for And before. on XXXX contract current we're completed preliminary track -- a under in

down just under continue will this select. that So

abnormal. would As costs, contracts, far pricing again as the and development it's contract, margin contract, but cost plus current expect, of as nothing you because low

there types were bidding different the of or types structures customer future contract that as provided that far of for. for various As future asked contracts, elements we

and the to we've past, customer, middle-of-the-road We've talked to was pricing those is a and pricing, this provided approach in mentioned. this our bidding, We or which based aggressive taken Jim no of as different. about the none on

Bank The America. Epstein from from next of is question Ron

should think could how looks are upside? off about about And there? like FARA are some What program for vertical competitions we has table, business? thinking how out support, it the lift flyer you outlook the the that? and we the other With Where see decent

Yes.

So Ron, is Jim this here.

kind technologies not platforms just what company be figure trying well. programmatic as mission the to is we that accomplish into horizontally through of at our kind the but is I'll enable out through lens to of can XXst the do roll or our basic successful what mission will it As the century, column look things vertical actual also and call core

of example, one right? of we're rotary Martin, It It's just at Congress And the for, FARA a reasons the being to let's that's and Sikorsky Army, program Hawk, lift there's to U.S. which vertical that's how the business. government the work of another looking in and increase rotor. we're canceled broader is Sikorsky plus in FLRAA, all say, not form U.S. that tilt is at fact with able going Black Lockheed the spite anymore. And support to for be of is

suited So just in there are the not rotorcraft. will extremely it's It's the Hawk for that lower for well missions the really lower air Black domain. rotary -- be

digital a meaning already. technology do what demonstrated to unmanned, do call the that uncrewed how the it, we've call those pair tie Hawk Hawk Black you traditional let's using drones domain Black a So the Force can Hawk, aircraft and combat with collaborative to by we Air digital modernizing lower Black and aircraft, would technology, rotorcraft, in air

actually do itself can pilots the autonomous You center to missions. flown Hawk make Black being with command in from high-risk it no a

AI, whether a won't XG, platform, through at missions it's we're that FARA looking the and to, Hawk, efficient a of the more sensor we the Lockheed some able relevant much platform assets say, do be a longer aircraft actually for make fusion, very compared Martin, to across the what space-based to Black platform sensor all much So anyway. lived saying, example, mission and can do

So in which Black a is does I itself we operations which And SEAHAWK, high mentioned configured the maritime a Hawk the that and tech includes Sikorsky strong that's CH-XXK, is produce. pretty then platforms for well. that as it have confidence that

to said missions think we future in really [indiscernible] those in with with and reliable of parts Sikorsky's the in $XX so I to on these really to LM his modernize platforms make remarks, ability in billion Jay with relevant feel other And solid, the things of backlog a and future. integrate -- and technology production other and new and digital do aircraft as

So to I'll Jay, anything have you stop want else there. you say?

Sure.

best couple things, stable a outlook way is it. of Jim to as A mentioned. describe Just the

is and CH-XXK those mentioned, XXXX pillar. double. Jim And between are As really revenues the going and now XXXX to

go of versus what offset had have of anticipated. than see in work a programs such on the combat do workforce will those declines will Hawk and we of originally other as production declines. we through We the CH-XXK rebalance And is a a development Black because mix all to different declines rebalance, bit little some rescue so work while the really of helicopter, others,

So that. go through we'll

also, mentioned, is But I have relevancy think as particularly Hawk be pretty to We're and modernization, the JADCX will maintain business, will Black in Jim continue stable. as I dialogue its just environment. mentioned, -- which investments in the

determine And are the best would missions with Army but dialogues base ongoing course, missions the be to other Those you only so, performs those. for well. of fit continue Black to opportunities the see Hawk what for as that not

back is from over go will as over much it come I years a X little actually where mentioned, a standpoint years, but up today. few so the flat bit, revenue next next the And it pretty to down,

to think, And I the stability, is way best it. describe so

is Spingarn question from The Melius from Research. next Rob

you the F-XX rate Jim, made supported put on impact the of XXX. international side, the by program at chain. call, we to the the things the of producing supply of of underscored Congress that's TR-X is countries And chain breadth in importance last one the F-XXs of well supply a the if the and so

more complexity the is F-XX? the supply and Lockheed scale in-house, potential program? be programs, aircraft to of compared FAXX, we do the fighter chain in-house NGAT affordability might expect it And work production whether of the But future the the to of and on when work or limiting

it's So Rob. great a topic,

origination And program. a you so of be with intended, It start said, was let's wide-based F-XX the program. as Allied the to

essentially contemplating. industrial program, that to X and its people we literally capacity their partners, and are together their treaty was it think partners this the and scale capacity all financial that get and contribute complexity I given importance

supply of COVID we little a of a program. the gotten times were chain. one for a that's was yes, couple broad pretty those. have There tough when So

the delayed So there because out open, the weren't deliveries although we were. factories ours had of U.K.

mitigating any to apply and going be partners, those going we international sustainment also forward. we're will methodologies we anti-fragility So But future we're And production to going and that. expand some to to initiatives programs we're eager that have. have

that second thing of third to have know be now to of course. really diversity But a And from we positive and -- sources. need COVID, geographic know we would thought one maybe perspective. No that we've had need that example, we

more broadly how about little this. a we thoughtful be just do we'll So

best single an Having the affordability not U.S. idea. probably There's too. issue around is the sources that, outside

have going we're to So just balance to out. everything

and to program, origination How weak a countries So weak spot's another based spots out it that essentially couple in glass canopy? the hard we right? Look, of on commitment do of supply spread the have to sort its is it. of canopies, the make chain a with

stress source, in needed which this of single the to look a F-X, of kind an that have. the that's bit. versus degraders complex, kind F-XX and put together Well, little of [indiscernible] one be and highly I to used precision with we produce, an big hard out

going to a international learn whether forward. from it's an again, going or we're domestic So supplier that,

In you and Martin best when technology. the on sure heavily addition, as out, we it that program are pointed chain can, of supply insourcing as at is reasonable has Lockheed the we can much We're we looking control that is. making and hard whatever based feasible

okay? critical and produce selected, Space make were most ones sensor that example, in to we sure were for efficiently components so, the Martin on the company collaboration And effectively NGI, was at that could Lockheed the that that

intend logistical of supply some further as issues we anti-fragility sources, F-XX, some different And much concept on to so this really as of chain that chain companies, chains, parts world, a the having diversify honestly. really We different prior like X where we things supply one. great including actually into geographically different topic programs, but either is won't on run X based or your have

from question Stallard from is Research. Rob Vertical Next

Jim, any willingness, your I from customer in you way some resonance commentary on of was way. willingness defense a wondering in perhaps at there's your last if from have customers with the and this look recent early fresh industry contract had been any dealing comments years. quarter, structures to the sort been and

let So really on industry, We in We opportunity defense area our will, to will subscription industry, because the that's digital partners a want want with work broader DoD ourselves. I just suppliers subscription focus only for me basis. but to bring you traditional that basis be contracting on the to ripe service on think fronts, too. play not if a

needs which kinds So of, and those modeling. say, AI, terms of things, in connectivity refreshing services, constant XG, backhaul,

We be to to They them will do lot and possible a not we're announced with work it. couple in IBM. us. a to AI the want of bring going partners. NVIDIA We We all to of like but want do of in-house,

interest this. inside to So on starting to get I do how government think do we're

et other lot like digital for largely acquisition alongside interest adjacent the a for will in ships, DoD different goods within in process process We DoD proposed, frankly, sectors cetera. of ourselves, which companies open opportunity up for physical an There's traditional the aircraft, acquisition services that.

the We haven't so over to speak. line, gotten it

as and in their and synchronize working drive system of frequencies, lot with of starting we're that in a all industry broad there's across and can same of lot of resources has their IP standards far that, and kinds those we of of base commercial industry so APIs, to as so potential think well. use want of their we a off more we and Congress things the as as more do more because use can Along I that with its interfaces, in and diversity much as people. that government But suppliers architecture to to other be an advocacy open places DoD U.S.

of it. a processes standards take here, So time put little get I agree and opportunity actually those it, starting bit get that some and to think it's -- But teammates those. partners those to on and in going a place. some getting we're to and we're But we with there's bodies lot on have traction of

the that requested Rob, closely aligned the assessment maturation is and seen that's of changes some with technology structure more add, of capability. just the where we contract I'll the being capability have

poorly many development and contracts And solution, a they so seeing optimize of really they end because these for well of don't contractor. you're anybody not the up that fixed-price for kind as typically work high-risk don't

risk we we're changes. But to you that in risk, have tell we the vehicles Again, contracting those more case. in a contracting that are seeing I those so relevant at circumstances. least shift can And higher are to just seeing, arenas, seen what particularly higher by technology-type case they're

a my in have speaking you more support development cost-based about what another -- view, is minute heard, Rob, maybe set Yes. to a fully way fixed is on object may been program to really arms thing around, Jay direct price having as here. a intellectually a yet. just a have committing price to or which that at hasn't project production that I cost early a even And is invented get of tough with least options and an

in And looking in company. really hard that's to presented that that's we're context any -- us as if a really, opportunity

of a about, So that basis. reasonable Jay to, is more again, what speaking highlight where can alignment risk an industry is one on what area deliver of

write-offs government it, so that out of get some think We alignment get delays. massive or schedule long And program not have can cost it's overruns constructive and to or industry frankly, in successful Jay the a of that described. more

Research. Our from next question Shapiro is George Shapiro from

and quick couple A at quarter for Jay. X%, the high you're was growth you, looking for If end, X.X%. even normalized ones the of first

So and will down obviously slows the this be the And fastest-growing what quarter? quarter? for fourth normalizing

guide the net million. other for was is question second the then And $XXX

XX. negative only First quarter is

that the I number So was year. lower might you for expecting

And the so what didn't was you reason lower why it?

George. right, All

I'd the here see to the in we're slow quarterly a normalized second the will down growth you digit single probably basis, to And mentioned, X% it thinking low third. that fourth slightly in profile the On first and quarter sales, as maybe on quarter. flattish for down.

XXXX of than fourth we that expecting. might the ended quarter were being You up originally recall stronger

quarter bit this tougher. our of year a fourth little compare be so in And the would

type talking the third a growth quarter. so quarters X% fourth you're X% in and flattish in to probably with second And of numbers year-over-year

of As assessment guide just we'll year. and full wait year just But halfway other there. got there. we'll the through an the the me entire net, prudent outlook, in update and calibrate that, quarter it we're as just and more far We'll for the some probably you it's probably to make the opportunity there. till George, leave second in There's

Sachs. from Goldman our is Noah And next question from Poponak

and trade also to asked Curious and what here, as on interim see, development. structure kind landed development multiple they contract maybe and you Pentagon -- see talked You terms But contract those of between you where mentioned structures. they of NGI for production. cost to plus mentioned you windows about asked

program And to Jay, then, there's the than to what that an And more profitable expect be MFC, you that year do annual loss-making one? basis? in just not confirm, correct, position, classified program in one on

Again, -- losses, a Yes, assume it's timing And of if probably just outlook linear -- I to that's approach XXXX. if you're the the from you about positive. on the probably be but would to that where XXXX right our say question we in one would Noah, think of is flip program. correct, now, to of kind more recognition of here out expect

anywhere which NGI, to again, price fixed vehicle exactly vehicles the As hasn't wants far cost as just incentive. ranging are contracting selected plus from pursue. different -- There customer the is to no

nothing phases. or under contract phase actually there's the So for next

Right to XXXX. now, critical we're got the I going to design continue review perform in mentioned. as We under contract, current

we'll provide of sure between on have in I'm We this have future now terms phases contract. some we assets. discussions of contract, then, and to also, And getting test part as

Jay the to And what are here that like a agnostic format matters. that the these Noah, to whatever basis would principle contract speaking in we employ ultimately to I want Yes. government and be risk-adjusted from is behind on

say, a of, something any that's I'll if production highest risk would So again, fixed on going kind been be it's be not yet. price to designed

basis on to us let's contract at just give greatest say, a case cost-based of to to kind because Martin's risk this cost, have least we we that's a Lockheed significantly premium have reply pure types on that's on requests a to is the We asking multiple of put is of see in an transfer going them going they're to to will risk risk government. now high those what have opportunity the future have want you the say, if contract, to kinds And industry contrast. premium and contract to what's give you that higher interesting for than, And will in NGI.

And that's from now going on. just the to use principle we're

to to premium government, if higher you'll see industry, we that that want shift So you contract risk certain as more will proposal, our you will. back But in price. want risk come provide if a will you point you get format a a price if you

and to principle using that So we'll we're use. continue that's the

more since I question top for Lois, we one the hour. to have close of the think time we're

and let's more, done. be So we'll one take then

Research And that Seaport question will Safran Partners. Rich come from from

question know -- CXBMC. to if margins. could terms quick Two-part and you P&L on I timing X-part the want of impact in discuss

a set more the -- fits you for Second thought and in this bit programs might about broadly, pulling how strategy there your what discuss with is? mission-centric with the I and opportunity

Okay.

Rich, got could And timing, This contract. For up are, do, we're is I follow a been for don't the what we've annual Maria us. offhand I but you. exactly recall revenues follow-on is on what -- under I

a just again, continuation is, those activities of this But there.

change at this. margin don't a significant RMS or revenue no think for so from I And expectation standpoint

trying the pretty this can pulling or And Rich, is so that data through right, right? of to which is flows through includes full extending in example from by the mission-centric actually way, you generally mission, a approach, a existing we're show And upfront. programs, cyber, that, so map and good now

you a So have to have sensing a cyber track, then you have capability.

to to comes system. have or sensor control You command a have from then into whether back the it and way data, submarine a satellite a get

data Along with beyond and just quality object of a that, have you that's an that targeting sensing have tracking comes the target. to from

or a the whatever to to against be. then projectile it out track a effector that You it guide it to or can the will target attack a you take and put be have or able laser way in cyber

kill chain. if mission. chains out in don't called your again, for want you you ability pretty. one these complete that a And so in not We the anti-fragile, to art that of which put diverse It's chain, that means the take together term eliminate link ways are, to is

flows where can we physical to provide start head that's our kind if have multiple to help architecture affect will, can and then flows, be data open in that you able create if designing of so missions, to we're And we can looking that And those. will system platforms at an a addition flows of data routes right? on

we're And that will more similar to CXBMC suppliers NGI open as outside us as options. using architecture. for competitive will example. Hawk Black what common a We'd like system. doing of doing The government That's be be the that's Lockheed the ultimately, with and and more on LRDR what we're missile because radar well provide Martin also up that inside the architecture to based

So here the and of you at this very it's is kind glad all the I'm asked coming question end because together, intentional.

express to doing everybody reason. this operational excellence. to call. their our the driving in the want focus And Thanks, at this Maria. relentless I on for and Thanks, we're my support Lockheed everybody, appreciation That's on I mentioned, of innovation customers. Martin Okay. also all execution

Security vision complex a deterrence that XXst think high have an We Century for we threatening will keep in and global increasingly environment.

operating driving a mindset backlog, continuous heard. this a whole have. company, As improvement discipline have across you we as organization strong we and We're the

that's company and and time. reliable shareholders for So a future position designed to our shareholders over of returns you long attractive as to all growth for period

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

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

now You disconnect. may