The company is likely to work with Pentagon in the coming days to work ways to reduce the price. And why not, Lockheed Martin has a history of cutting down on the prices of aircraft. A price reduction could, in turn, lead to pressure on its margins, but the high volume of orders should help the company maintain a straight balance sheet. Pentagon alone is planning to buy about 2,400 F-35s.
And we have been talking only about the aeronautics segment so far. The defense contractor, which reported $51.05 billion in sales last year, has three more high-octane segments, including Space operations that reported sales of a massive $9.5 billion last year.
Apart from these, Lockheed Martin, last week grabbed another big deal with the Kingdom of Saudi Arabia in a contract valued at $481.1 million. Under the agreement that may expand in value to up to $22 billion, Lockheed Martin will build and supply MMC warships to the oil-rich Kingdom.
Analysts expect Lockheed Martin to post high single-digit growth in revenue in the next three years, based on these contracts as well as the promises in Trump’s 2019 budget that vows to modernize and rebuild the military. The company will see a boost once the F-35 sales pick up, in conjunction with the healthy missile sale it is already witnessing.