The shares of Lockheed Martin (NYSE: LMT) fell on Wednesday, as investors’ reaction to the news raised questions about the future momentum of the company for its pioneering program F-35 Fighter Jet.
As of the time of the press, the LMT share decreased by approximately 6 %, as it was traded at $ 448.70. This decrease extends the weekly loss of the share to more than 7 %.
Why LMT stocks are disrupted
The sale appears to be a reaction to the investor to a report stating that the US Air Force intends to reduce the orders of the F-35 in the coming fiscal year.
According to the document of the purchase of the Ministry of Defense in which he was martyred BloombergThe Air Force plans to request only 24 aircraft instead of the 48 required last year.
The proposed budget includes $ 3.5 billion for the plane, a decrease from previous levels, and $ 531 million to gain advanced materials.
The F-35 carrier of the navy also faces discounts, as the Pentagon requests 12 aircraft, a decrease from 17 of Congress last year. The marine infantry has been set to receive two planes less than the current plan.
These discounts are especially worrying about American defense contractors, as the F-35 program represents about 30 % of the company’s revenues.
At the same time, production was already slowed by delaying the upgrade of the main technology.
In addition to the uncertainty, the financial director, Ivan Scott, is registered that the F-35 final contract is expected in the second half of the year, and perhaps by the end of June.
It is worth noting that Lockheed had previously signed two major contracts, and perhaps one coming in the first half of 2024 and another by the end of the year 2025.
Besides F-35, the public defense sector is preparing for discounts in a possible budget under President Donald Trump’s administration. Specifically, the Pentagon’s move is in line with a greater plan to reduce military spending by 8 % over the next five years.
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