“We fully expect to see recovery in these areas as we improve execution, deliver next generation capabilities, and roll into new contracts with stronger underwriting disciplines that more accurately reflect the prevailing economic conditions.”

In context

“stones to evaluate our performance and progress across the three areas that we’ve previously highlighted. First, we have a solid core business representing about 60% of our revenue that performs in the mid to high-single digit margin range. The demand for these products is strong. In particular, volume for our missile and weapons products as well as the Apache are very robust given the current threat environment, and we need to keep executing, competing and growing these offerings. Then we have the 25% of the portfolio representing specific fighter and satellite programs that have negatively impacted margins the past several quarters. In these areas, we took on fixed price production contracts in a pre-pandemic environment with real technical innovation that we’re working our way through. We fully expect to see recovery in these areas as we improve execution, deliver next generation capabilities, and roll into new contracts with stronger underwriting disciplines that more accurately reflect the prevailing economic conditions. We expect to return to the strong performance levels that we’ve demonstrated historically on these programs as we move into the 2025, 2026 time frame. Lastly, we have our large fixed price development programs that represent the remaining 15% of the portfolio, and we continue to be focused on maturing and retiring these risks. Specifically, on the KC-46A program, we’re stabilizing the production system. We’ve seen signs of progress and improved productivity, and as of this month, we have delivered 77 tankers to the customer. For the VC-25B, we’re now maturing through the build process, and the key milestones ahead are power on and first flight, both of which will essentially be behind us as we move through the 2025, 2026 time frame and represent a significant derisking of the program. For”