Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Lockheed Martin Corp (LMT - Analyst Report) clinched two back-to-back contracts from the Department of Defense. The contracts are valued at a total of $17.1 million.

The first contract worth $7.2 million calls for Lockheed’s Information Systems and Global Services operating wing to develop a software for providing support to the Tactical Tomahawk Weapons Control System (TTWCS).

The TTCWS is a sophisticated system that computes routes for Tomahawk cruise missiles to strike targets. It inputs new missions data into the system on-site and, on launching of the missile, is able to communicate with multiple Tomahawks to swiftly retarget and reposition the missiles in flight.

The second contract went to Lockheed’s Missiles and Fire Control division for the delivery of Joint Air-to-Surface Standoff Missile (JASSM) Common Unique Planning Component software to the U.S. Air Force. This contract is priced at $9.9 million.

Previously, a basic ordering agreement was inked with the Air Force against which this current contract was awarded to Lockheed. The current contract is expected to be concluded by Jun 25, 2015.

As of now, the U.S. Air Force's B-1, B-2, B-52, F-16 and F-15E aircrafts are equipped with JASSM. Overseas, JASSM is certified on the F/A-18A/B for the Royal Australian Air Force.

Amidst the uncertainty regarding the defense budget, domestic contract flows for Lockheed has been low priced. The budget cutback will further increase in the future with the defense expenditure predicted to decline to $611.0 million in 2017 from $645.7 million in 2012.

Moreover, reverse engineering methods employed by China and Iran will enable these countries to offer low-cost defense products which might provide stiff competition to domestic U.S. companies like Lockheed.

However, the company secured a series of international contracts which will boost Lockheed’s growth opportunities. Recently, the joint establishment of Lockheed and Northrop Grumman Corp. (NOC - Analyst Report), the LONGBOW Limited Liability Company received a $90 million contract from Saudi Arabia for the supply of LONGBOW Fire Control Radars (FCRs) for their AH-64 Apache Attack Helicopters.

Lockheed’s diversified business operations and combined order backlog of $21.2 billion at the end of the first quarter from the Missile and Fire Control as well as Information Systems & Global Solutions segments will contribute to a stable earnings stream. Presently, Lockheed carries a Zacks Rank #3 (Hold).

However, other defense operators well positioned in the industry are Zacks Ranked #1 (Strong Buy) Erickson-Air Crane Inc. (EAC - Snapshot Report) and Zacks Ranked #2 (Buy) Wesco Aircraft Holdings Inc. (WAIR - Snapshot Report).

Bethesda, MD-based Lockheed Martin is a security and aerospace company and engages in the research, design, development, manufacture, and integration of defense products.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
BITAUTO HOLD BITA 35.33 +14.82%
ANI PHARMACE ANIP 24.79 +14.66%
E HOUSECHINA EJ 10.99 +9.24%
CANADIAN SOL CSIQ 26.97 +7.15%
INTERNATIONA ICAGY 33.30 +5.38%