Deliveries of F-35 Joint Strike Fighter aircraft are on track to resume this summer, albeit with a truncated version of Technology Refresh-3 software upgrades, top Lockheed Martin executives told shareholders today during a call to discuss the company's first-quarter earnings.
The not-yet-complete, or “combat training capable configuration,” tranche may arrive at squadrons by the third quarter of 2024, but fully combat-coded TR-3 deliveries won’t begin until 2025, said Jim Taiclet, Lockheed Martin’s chief executive officer.
The idea is to get the jets into the hands of units as soon as possible so they can begin training pilots and maintainers and to help air bases prepare their facilities for handling F-35 spares in “operational shape,” he said.
“Once we get the final software load for the fully combat-capable version of TR-3, sometime in the next few months, then those aircraft could be deployed into actual combat operations” without further testing because units would already have the procedures in place to safely fly the jet in combat, Taiclet said.
The company did not send any jets to the Air Force in the first quarter of the year but expects to deliver 75 to 110 F-35s throughout 2024. The Air Force in 2023 temporarily halted F-35 deliveries until Lockheed Martin could produce a stable and mature software configuration, per the requirements laid out by the service in a contract for Lot 15-17.
Now, Lockheed said flight testing for the so-called combat-training-capable software configuration, which includes roughly 95% of anticipated TR-3 capabilities, is currently underway.
The company’s projections echo that of F-35 Program Executive Officer Lt. Gen. Michael Schmidt, who said last week that the long-delayed software improvements needed to support new mission capabilities brought on by Block 4 upgrades could be delivered as early as July, but likely August or September.
Several updates are expected across the Block 4 lifecycle as the government rolls out various modernized sensors, munitions sets, advanced electronic warfare capacity and other operational capabilities the service says are crucial to maintain air dominance in a potential future fight in the Indo-Pacific.
“What we’ve run into on TR-3 is just a level of complexity and executing the step function increase that is pretty, I’d say, novel or dramatic,” Taiclet said of the delays. “And so what’s happening now is we are wringing out all the software through all of the new hardware and integrating it into all the aircraft, other systems, and that’s taking longer than our team predicted.”
Overall, the company cited an increase in sales across all four of its business units -- aeronautics, missiles and fire control, rotary and mission systems and space -- at a total of 14% compared to the same time last year. Taiclet told shareholders they could expect to see a greater boost in F-35 and munitions sales pending Senate passage of a $95 billion foreign aid package slated to be voted on today. The House on Saturday passed national security supplementals for Ukraine, Israel and the Indo-Pacific.
“We expect [fiscal year 20]25 presidential budget request and additive supplemental funding will provide a strong underpinning for future growth over the next years for our company, giving us further confidence in our long-range plans,” Taiclet said.
At the same time, Lockheed recorded a $100 million reach-forward loss in earnings related to a classified missile program.