Lockheed-Martin plummeting as Congress set to request 35% fewer F-35'
Down 6.5% this morning
March 16 (Reuters) - The Pentagon will request 61 F-35 stealth warplanes from Lockheed Martin Corp (LMT.N) in its next budget, 33 fewer than previously planned, Bloomberg News reported on Wednesday, citing people familiar with the matter.
"The Department cannot confirm specific budget details until after the FY23 President's Budget is released," a Pentagon spokesperson told Reuters.
Shares of weapons maker Lockheed Martin, which counts the U.S. government as its biggest customer, were down 3.4% in early trading.
I think that the US scaling back plane orders demonstrates that Lockheed has a hard limit on production capacity, because the US had to limit its order by 33 in order to allow the Germans to buy 35 planes. So Lockheed stock tumbled because it had initially gotten a boost from the news of the German plane sales, but it's only producing maybe 2 more planes, if that.
But unfortunately, Lockheed's limited capacity issue dragged down Raytheon, Northrop Grumman and L3 Harris today, too. And they're supplying armed drones and other weapons & technology where production can be scaled up more easily. Those 3 defense contractors should not have fallen today. Especially L3 Harris because it's heavily into battlefield tech & does lots of R&D. It's probably the least constrained by cumbersome production processes of all the top 5 defense contractors