Sikorsky reports Q3 drop in net sales, but highlights future production growth potential

By Dan Parsons | October 24, 2019

Estimated reading time 3 minutes, 42 seconds.

Sikorsky saw a $160 million drop in its net sales in the third quarter, compared to the third quarter of 2018, due mostly to decreased movement of helicopters, according to the newly-released earnings report from parent company Lockheed Martin.

A recently awarded Bureau of Land Management contract for a restricted category Black Hawk helicopter has raised new questions about who is permitted to fly on restricted category aircraft. Shawn Evans Photo
Sikorsky saw a decrease in net sales for its helicopter programs in Q3 — primarily Black Hawk production and mission systems. Shawn Evans Photo

The U.S. defense contractor’s Rotary and Mission Systems business, which includes Sikorsky, saw a $139-million decrease in sales for the quarter “primarily attributable to lower net sales . . . for Sikorsky helicopter programs due to lower volume (primarily Black Hawk production and mission systems programs),” Lockheed said in a press release that accompanied its regular quarterly sales call.

The decrease was offset by an increase of $40 million in other segments within RMS, grouped under the weighty acronym C6ISR (command, control, communications, computers, cyber, combat systems, intelligence, surveillance, and reconnaissance). Other than Sikorsky, RMS is somewhat of a catch-all division within Lockheed that includes avionics, mission systems, sensor development, training and logistics systems and radars.

Still, Lockheed chief executive Marillyn Hewson was bullish about a relative wealth of helicopter programs that are nearing production and should boost Sikorsky’s profits over the next decade. The company is on contract to build the massive CH-53K for the U.S Marine Corps, the U.S. Air Force’s new Combat Rescue Helicopter and the VH-92 U.S. presidential helicopter replacement.

“In Rotary and Mission Systems, our Sikorsky team completed an extensive set of testing for our Combat Rescue Helicopter to successfully achieve the milestone C decision, moving the program into the low rate initial production phase of the contract,” Hewson said during the earnings call. “The joint Sikorsky and U.S. Air Force test team executed over 70 hours of envelope expansion, validating the modifications to the venerable Black Hawk platform, that will allow it to perform its important search-and-rescue mission.”

The U.S. Air Force program of record is for 113 helicopters with five aircraft currently in various stages of production, she said.

Ramping up production of the F-35 Joint Strike Fighter is Lockheed’s priority for the next decade and should drive most of the company’s projected five percent growth, Hewson said. Sikorsky also has a pony in the race for the Army’s Future Attack Reconnaissance Aircraft (FARA) that will fill the armed scout role vacated by the now retired OH-58D Kiowa Warrior and the Future Long-Range Assault Aircraft (FLRAA), both of which represent juicy growth opportunities.

“When you look at the growth for the company, F-35, of course is going to be our major element of growth for the next five to 10 years,” Hewson said. “We know that from ramping up production sustainment of it, than the aircraft. But in addition to that, when you look at [the] Sikorsky CH-53K, the Combat Rescue Helicopter, even the presidential helicopter — all programs that will be into production and our platforms for us going forward. Future Vertical Lift is another area.”

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