Lockheed, Northrop Win DoD Contracts - Analyst Blog
06 Septembre 2013 - 1:05AM
Zacks
Defense major Lockheed Martin Corp. (LMT) won a
$48.8 million modification contract to provide technical services
on the Aegis air defense system for the U.S. Navy.
Per this contract, the company will have an option to provide
technical engineering, configuration management, related
equipment/supplies, quality assurance, information assurance, and
additional operation and maintenance services for the Navy’s Aegis
air defense system. The work on this contract is slated for
completion by June next year.
The latest contract is a part of the U.S. Department of Defense’s
(DoD) 14 new contracts announced on Sep 3, 2013. Among the awards,
Northrop Grumman Corp. (NOC) won a $6.6 million
contract modification for large aircraft infra-red counter measure
(LAIRCM) systems. These systems have been developed for the U.S.
Air Force.
The contract is expected to run through Sep 2014. LAIRCM is an
on-board system utilized for protecting large transport helicopters
and airplanes from hostile missile fire.
Though the aerospace and defense industry is vulnerable to defense
budget cuts and sequestration, the defense behemoths have
diversified their businesses and are not lacking in DoD
contracts.
Apart from small pickups from DoD contracts, these companies are
also clinching deals of higher value. Recently, Lockheed Martin
received a contract from the DoD to provide 19 additional AN/TPQ
(Q-53) radar systems, a long-range counter fire radar that provides
soldiers with enhanced 360-degree protection from indirect fire.
The contract is worth $206 million.
The company also received a contract worth $852.3 million from the
DoD to provide the required equipment for F-35 fighter jets under
Low Rate Initial Production Lot 6.
Lockheed Martin is the largest U.S. defense contractor with a
platform-centric focus that guarantees a steady inflow of follow-on
orders. We expect Lockheed Martin to register a stable performance
in the long run due to a leveraged presence in the Army, Air Force,
Navy and IT programs.
The company presently retains a short-term Zacks Rank #2 (Buy).
Other favorable names in the space include Alliant
Techsystems Inc. (ATK) and Huntington Ingalls
Industries, Inc. (HII). While Alliant Techsystems carries
a Zacks Rank #1 (Strong Buy), Huntington Ingalls holds a Zacks Rank
#2 (Buy).
ALLIANT TECHSYS (ATK): Free Stock Analysis Report
HUNTINGTON INGL (HII): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis Report
NORTHROP GRUMMN (NOC): Free Stock Analysis Report
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