Lockheed Wins LRLAP Deal - Analyst Blog
25 Septembre 2013 - 12:05AM
Zacks
Aerospace and defense major Lockheed Martin
Corporation (LMT) continues to receive U.S. Department of
Defense (DoD) contracts in spite of the threat of sequestration.
The company recently won a contract from the National Warhead and
Energetic Consortium to bring the Long Range Land Attack Projectile
(LRLAP) to production.
The contract calls for Lockheed to develop production line tooling,
check equipment and manufacturing process plans for the initial
phase of production. The control unit will be assembled at Lockheed
Martin's Ocala, FL facility, while the ultimate assembly of LRLAP
will be at its Troy, AL facility.
LRLAP is an advanced new variety of GPS-guided artillery system
that integrates conventional artillery guns and rocketry with
existing lightweight guns. With a maximum range of over 63 nautical
miles (72 miles), LRLAP is the longest-range projectile in the
Navy’s history that enables the naval force to deliver 24-pound
payloads well over the horizon.
Lockheed Martin – the largest defense contractor in the world – has
a wide customer base comprising the U.S. government, foreign
governments and other commercial buyers.
Sequestration and spending cuts were expected to adversely impact
the performance of the defense behemoths that explicitly provide
products and services to these defense establishments. However, the
defense players seem to be doing well despite the cuts in defense
budgets and big-ticket programs. Small contracts doled out by the
DoD have kept alive the revenue stream of these companies.
Lockheed has, in fact, clinched a major share of DoD contracts
awarded on Sep 20, 2013. Of the total $4.95 billion worth of DoD
contracts, Lockheed sealed approximately 81% of the amount,
comprising five modification contacts. The biggest share of these
multiple contracts, with a value of $3.92 billion, would pay for
the production of Terminal High Altitude Area Defense (THAAD)
missiles for the U.S. armed forces and also for United Arab
Emirates.
Lockheed Martin presently retains a short-term Zacks Rank #1
(Strong Buy). We are impressed by the company’s strong operational
performance that drove management to raise its full-year earnings
guidance to $9.20–9.50 from $8.80–9.10.
Other stocks that are also worth considering in the space include
Northrop Grumman Corp. (NOC), Raytheon
Co. (RTN) and Alliant Techsystems Inc.
(ATK). While Alliant Techsystems carries a Zacks Rank #1 (Strong
Buy), Northrop and Raytheon hold a Zacks Rank #2 (Buy).
ALLIANT TECHSYS (ATK): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis Report
NORTHROP GRUMMN (NOC): Free Stock Analysis Report
RAYTHEON CO (RTN): Free Stock Analysis Report
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