Egypt may order new batch of F-16s

By Edmond Lococo

Lockheed Martin Corp., the world’s largest defense company, may sell Egypt 24 F-16 jets to replace aging aircraft, Chief Executive Officer Robert Stevens said. “The case in Egypt is unfolding,” Stevens said today at the Sanford C. Bernstein Strategic Decisions Conference in New York, without disclosing the potential contract value in the Webcast presentation. “As you fly these airplanes in operations, there is ordinary attrition that occurs.” Egypt began flying the F-16 in 1982, after years of using military equipment supplied by the former Soviet Union, and received a total of 220 of the aircraft called Fighting Falcons through 2002. An order for 24 of the jets would be worth about $1 billion, excluding any support contract, said Peter Arment, an analyst with Broadpoint AmTech in Greenwich, Connecticut. “The number of F-16s acquired on the international market remains very healthy and will keep production running into the middle of the next decade,” Arment said. “The F-16 is a very mature production program. They have healthy margin performance on this program so any additional orders allow Lockheed to continue to build momentum for higher earnings growth.” Stevens made the announcement ahead of a scheduled four-day overseas trip by U.S. President Barack Obama next month that will include a stop in Egypt, as well as Saudi Arabia, France, and Germany. The F-16 is flown by 25 nations and more than 4,400 of the aircraft have been delivered over the life of the program through March 19. Lockheed posted total sales of $42.7 billion last year. Bethesda, Maryland-based Lockheed gained $1.78, or 2.2 percent, to $82.99 at 4:01 p.m. in New York Stock Exchange composite trading. The stock lost 23 percent in the past 12 months.

By Edmond Lococo in Boston at elococo@bloomberg.net.

Posted in: F-16,Fighter jet