US weapons maker Lockheed Martin’s first-quarter results surpassed Wall Street targets on Tuesday (Apr 18) despite parts and labour shortages, as simmering geopolitical tensions fuelled demand from both US and international customers.

Shares of the company rose as much as 2.3 per cent to about US$501 in premarket trading.

Rising tensions in Europe, the South China Sea and the Indo-Pacific region have translated to more orders for Lockheed’s F-35 fighter aircraft, missiles and other defence equipments, driving quarterly net sales of US$15.13 billion above estimates of US$15.03 billion.

The Pentagon’s US$858 billion defence budget for 2023 has also resulted in multiple contract wins for US defence firms such as Lockheed, Raytheon Technologies and Northrop Grumman, which count the US Department of Defense as their biggest customer.

Bethesda, Maryland-based Lockheed reported GAAP earnings per share of US$6.61, which included non-operational gains of US$0.18 per share, and adjusted earnings of US$6.43 per share for the first quarter ended Mar 26. Analysts were expecting profits of US$6.06 per share.

During the quarter, Australia said it would buy 40 Black Hawk military helicopters made by Lockheed from the US for about US$1.96 billion as it boosts defence spending over issues with China’s presence in the Indo-Pacific region.

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Lockheed had also finalised a deal to sell 88 F-35 jets to Canada in a US$14.2 billion project to replace the country’s ageing fleet of fighter aircraft.

Supply-chain issues stemming from the pandemic are still hurting F-35 production volumes though, pulling down sales at the company’s aeronautics unit – its largest – by about 2.1 per cent to US$6.27 billion in the quarter.

Lockheed’s order backlog also fell to US$145.1 billion as of quarter-end from US$150 billion at the end of 2022.

The missiles maker reaffirmed its full-year outlook, projecting net sales in the range of about US$65 billion to US$66 billion and profits between US$26.60 per share and US$26.90 per share. REUTERS