By Doug Cameron

Lockheed Martin Corp. said it expects sales to rise about 3% next year as the world's largest defense company provided a first look at the impact of slowing military budget growth.

The company said Tuesday that it expects sales to be at or above $67 billion in 2021 as it reported forecast-beating quarterly earnings and boosted 2020 guidance following a rise in its order backlog to a record $150 billion.

The defense industry has been one of the U.S. economy's most-resilient sectors during the pandemic, with its designation as an essential industry allowing plants to avoid shelter-in-place orders. The Pentagon also has accelerated contract payments to help the sector's smaller suppliers.

But the U.S. defense budget is forecast by analysts to grow in the low single digits over the next several years, with a rising federal deficit from spending to tackle the coronavirus pandemic hitting investment in military spending.

Lockheed Martin's third-quarter profit rose to $1.7 billion, from $1.6 billion a year earlier, and per-share earnings climbed to $6.28 from $5.70, above the $6.09 consensus among analysts polled by FactSet. Sales rose to $16.5 billion from $15.2 billion.

Lockheed Martin said its 2021 guidance assumed it was compensated for pandemic-related costs, which analysts have estimated to be around $2.5 billion.

Its shares rose about 0.25% in premarket trade.

Write to Doug Cameron at doug.cameron@wsj.com

(END) Dow Jones Newswires

October 20, 2020 08:26 ET (12:26 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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