It is often said that good things come to those who wait, and that will include the latest upgraded Lockheed Martin F-35 Lightning II. The fifth-generation stealth aircraft has slipped behind schedule, and deliveries are not likely to continue until the third quarter of 2024.

As many as 120 F-35s could be "undelivered" in 2024 as a result of delays with the stealth fighter's Technology Refresh 3 (TR-3) upgrade, according to Lockheed Martin Chief Financial Officer Jay Malave, who broke the news in an earnings call with investors.

The aerospace giant is on track to deliver between 75 and 110 F-35s in 2024 – fewer than the roughly 150 that Lockheed Martin had typically delivered, and below the original projections for this year.

Last September, Lockheed Martin announced it would deliver 97 aircraft in 2023, all in the TR-2 configuration, and that it remained focused on receiving the necessary hardware from our suppliers to deliver this critical combat capability for the F-35.

Trouble With the TR-3

As previously reported, the TR-3 upgrade has caused issues with the delivery of the F-35. It is a major update to the hardware and software of the fighter jet, with improvements to cockpit displays, additional computer memory, and processing power, among other things. The update was supposed to be ready by last April, but it is still ongoing more than eight months later.

"Making things a bit more complicated, the long-planned Block 4 software of the F-35 that will further advance the capabilities of the stealth fighter jet by adding more long-range precision weapons, enhancing target identification, and bolstering electronic warfare attributes will rely on the TR-3's infrastructure," wrote Stavros Atlamazoglou earlier this month. "Until the TR-3 update is finished, Block 4 can't roll out as expected. As such, the Government Accountability Office expects Block 4 to be ready with a three-year delay (2029 instead of 2026)."

In November, the F-35 Joint Program Office (JPO) confirmed that a production F-35 had flown with an interim version of the TR-3 software installed. Flying jets with such early-release versions of the software is “potentially” one way for deliveries to resume before TR-3 is done, the JPO said that month, according to Defense News.

Revised Rather Than Great Expectations

Lockheed Martin surpassed analysts' forecasts for the fourth quarter and met its revised expectations of 97 F-35 deliveries in 2023, delivering a total of 98 jets in the TR-2 configuration during the year, Breaking Defense reported.

Though the company will deliver those 75 to 110 Lightning IIs in 2024, the majority won't be until later this year.

"That's rather concerning, and implies that the TR 3/Block 4 problems are persisting longer than expected," Richard Aboulafia, managing director at AeroDynamic Advisory, told Breaking Defense today regarding Lockheed's 2024 F-35 delivery target. "That's definitely a disappointing objective on many levels."

A Banner 2023 for Lockheed Martin

Despite the issues reaching the quota of F-35s, Lockheed Martin saw its net sales increase in 2023. Net sales for last year were $67.6 billion, compared to $66.0 billion in 2022, while net earnings in 2023 were $6.9 billion, or $27.55 per share, compared to $5.7 billion, or $21.66 per share, in 2022.

In addition, cash from operations in 2023 was $7.9 billion, compared to $7.8 billion in 2022. Free cash flow in 2023 was $6.2 billion, compared to $6.1 billion in 2022.

"Our solid finish to 2023 and full-year results reflect continued strong demand for our all-domain portfolio of advanced defense tech solutions. Backlog reached a record $160.6 billion and sales increased 2 percent year-over-year to $67.6 billion," said Lockheed Martin Chairman, President and CEO Jim Taiclet. "In 2023 we invested $1.5 billion in research and development and an additional $1.7 billion of capital expenditures to create, accelerate and refine the development of innovative 21st Century Security capabilities. In line with our expectations, we generated $6.2 billion of free cash flow for the year, supporting strong free cash flow per share growth, and we returned over $9 billion to shareholders through dividends and share repurchases.

"Looking ahead to 2024 and beyond, our opportunities to support global security for the U.S. Government and its allies remain robust with traditional and breakthrough technologies. Our team will continue to realize the vision for 21st Century Security integrated platforms and systems, working with industry and commercial partners to pioneer and mature deterrence solutions for customers worldwide. Inside the company, our 1LMX digital transformation initiative will further materialize and drive speed, resiliency, efficiency and competitiveness across our operations. As a result, we anticipate continued top-line growth in 2024 and sustained cash flow conversion and deployment, in support of our mid-single digit growth target in free cash flow per share."

Author Experience and Expertise: Peter Suciu

Peter Suciu is a Michigan-based writer. He has contributed to more than four dozen magazines, newspapers, and websites with over 3,200 published pieces over a twenty-year career in journalism. He regularly writes about military hardware, firearms history, cybersecurity, politics, and international affairs. Peter is also a Contributing Writer for Forbes and Clearance Jobs. You can follow him on Twitter: @PeterSuciu. You can email the author: [email protected].