Lockheed Martin shares drop after Trump tweet on defence sector

Shares Lockheed Martin slipped while rival Boeing’s rose Friday after a tweet from President-elect Donald Trump appeared to pit the two defense industry giants against one another in a bid to lower prices for government contracts.
It was just the latest targeted jab at US corporations that may have led to volatile trading.
During his campaign, Trump lambasted Ford for beefing up operations abroad. He said he would not eat Oreo cookies that may soon be made in Mexico and vowed to get Apple to make iPhones in the US
Now it’s Boeing and Lockheed, the defense contractors, who are defending their business practices after Trump tweeted late Thursday: “Based on the tremendous cost and cost overruns of the Lockheed Martin F-35, I have asked Boeing to price-out a comparable F-18 Super Hornet!“
Trump tweeted earlier this month that he is looking to cut “billions” in costs for military purchases.
Boeing Co. spokesman Todd Blecher said, “We have committed to working with the president-elect and his administration to provide the best capability, deliverability and affordability.”
Lockheed Martin Corp., based in Bethesda, Maryland, said earlier this month that it has worked to lower the price of the F-35 one-seat fighter aircraft by more than 60 percent and that it expects the aircraft to cost $85 million in 2019 and 2020.
The F-35 program made up 20 percent of Lockheed’s revenue of $46.1 billion last year. And US government orders made up 78 percent of its revenue last year. The F-35 program directly or indirectly supports more than 146,000 US jobs, according to the company’s website.
Lockheed Martin’s stock declined $3.21, or 1.3 percent, to close Friday at $249.59.
Two weeks ago, Trump threatened to cancel Boeing’s contract to build Air Force One because of “out of control” costs.
Chicago-based Boeing relies less on that contract than Lockheed does on the F-35 program. Its shares ended up 35 cents to $157.81 Friday after earlier dropping to $156.51.
Trump met with the CEOs of Boeing and Lockheed Martin Corp. Wednesday and CEOs from both companies said that they had discussed lowering costs of the F-35 and Air Force One projects.
Boeing and Lockheed are also among the companies pursuing a contract for replacing Minuteman missiles in the US nuclear arsenal. Representatives for the two companies declined to comment on whether that contract came up during the meetings this week.

Source: Arab News