By Nathan Gomes
(Reuters) -U.S. weapons maker Lockheed Martin (NYSE:LMT) cut its full-year delivery forecast for F-35 jets as delays at supplier L3Harris Technologies (NYSE:LHX) held up development of an upgraded version of the aircraft, the company said on Wednesday.
The delays at Lockheed's largest program pushed shares down to 4.7% at Wednesday's close, while L3Harris settled 1.3% lower.
Lockheed now expects to deliver 97 aircraft that run on existing technology this year, it said in a filing, down from between 100 and 120 jets it previously forecast. The company, however, maintained its annual financial outlook.
"We have updated our F-35 TR-3 schedule projections with a first TR-3 aircraft delivery between April and June 2024," Lockheed said. It earlier expected to deliver the first jet by the end of this year.
"The development of the Integrated Core Processor(ICP) by L3 Harris has driven delays due to unexpected challenges associated with hardware and software development, component and system integration testing and system qualification testing," it added.
Lockheed has parachuted employees to L3Harris to help expedite hardware delivery and is also working with RTX on their delivery of Next Gen Electro Optical Digital Aperture System.
L3Harris in an emailed response to Reuters said it overcame early design challenges and delivered a fully qualifiable ICP to Lockheed Martin well over a year ago.
"We continue to work closely with Lockheed to support them in the integration of their software into the TR3 hardware. L3Harris remains fully committed to the F-35 program," L3Harris added.
Lockheed's advanced F-35 jet generated 27% of total consolidated net sales and 66% of aeronautics' net sales in 2022 on the back of strong demand from countries ramping up their defense spending.
The company has been upgrading the jets under the TR-3 (Technology Refresh 3) program that aims to improve displays and processing power.
The defense contractor said in July that the completion of the software integration testing would likely cause delays to its TR-3 jet.
Lockheed on Wednesday said it was making the jets at a rate of 156 per year and expects to continue at that pace while working to finalize TR-3 software development and testing.