Lockheed Martin (LMT) said on Tuesday it delivered fewer-than-forecast F-35 jets in 2016 and that it has found “material weakness” in internal controls of financial reporting at its Sikorsky helicopters business.
Lockheed said Sikorski’s internal controls were ineffective and that financial results may be misstated.
The information technology systems for Sikorsky’s financial reporting lacked sufficient controls to validate the accuracy of the information, according to a person briefed on the matter who spoke on condition of anonymity because the person was not authorized to speak publicly.
The source added that Lockheed continues to audit the systems and did not expect to identify material deficiencies.
A Lockheed representative declined to comment.
Lockheed, the Pentagon’s No. 1 weapons supplier, said the company so far has not identified any material errors in the financial results or balances due to the control deficiencies at Sikorsky.
Lockheed also said there was no change in its previously reported financial statements due to the control deficiencies.
Lockheed, whose F-35 fighter jet program has been criticized by President Donald Trump as too expensive, said it delivered 46 F-35s in 2016, fewer than the 53 it expected.
Lockheed‘s shares were down 2.5% at $250.99 in early trading.
Lockheed expects 2017 net sales to rise 4.6% to 7.1%, compared with a previous forecast of a 7% increase. It forecast 2017 earnings of $12.25 to $12.55 per share.
Analysts, on average, expected a 2017 profit of $12.87 per share on a nearly 5% increase in sales, according to Thomson Reuters I/B/E/S.
Net sales rose to $13.75 billion in the fourth quarter from $11.52 billion a year earlier.
Fourth-quarter net earnings from continuing operations increased to $959 million, or $3.25 per share, from $817 million, or $2.63 per share.
Analysts, on average, expected a profit of $3.06 per share on revenue of $13.03 billion.
