Lockheed Martin forecasts fresh wave of cargo, strike orders

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Lockheed Martin's aeronautics division expects to sign a fresh wave of sales to foreign customers in 2009 for the C-130J, F-16 and F-35 Joint Strike Fighter. The potential influx of new orders would be driven partly by the falling value of the US dollar, a boon for exports by US manufacturers, says chief financial officer Bruce Tanner.

"It helps to have the dollar in the position it's in right now," said Tanner during a teleconference with Wall Street analysts on 22 April.

Tanner's forecast to 2010 includes a likely doubling of the C-130J's current annual production rate, the first confirmed orders for the F-35 by international customers and several new foreign sales of the F-16.

On the domestic front, Tanner also expects a reversal of fortunes for Lockheed's AGM-158 JASSM weapon system, with an improved supply chain likely to be recertificated for continued production soon. The US Air Force shut production after test flights revealed a series of minor component failures. The office of the Secretary of Defense confirms a go-ahead meeting for JASSM was scheduled on 15 April, but postponed with no explanation.

A restored JASSM programme, coupled with a fresh wave of foreign deals for strike and cargo aircraft, could give Lockheed a needed boost. New aircraft deliveries this year are expected to fall below last year's total, and the F-22 production line faces a potential shutdown decision next year.

The US Department of Defense has requested funds to buy only four more F-22s next year 16 fewer than ordered this year. But at the same time, the DoD is not requesting any funds to pay Lockheed to start shutting down its production line after parts for the last aircraft start to be shipped later this year.

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"I think the actions you're seeing now are pushing that decision off this year and pushing it off to the next administration," says Tanner.

A new contract for "four or so" more C-130Js should be completed in the second quarter of this year, Tanner says. That deal "may be [signed] a little quicker than we expected", he adds.

Morocco's agreement to buy 24 new F-16s should be signed during this quarter, he says, but the timing for completing a major deal with Taiwan for 60 new F-16s is "anyone's call right now".