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Lockheed Martin Corp. (LMT - Analyst Report) received two contract modifications for approximately $90 million from the Department of Defense (DoD).

The first contract worth $75.2 million is under the Contractor Logistics Support, Legacy Sustainment, and Combined Task Force Support program. Per the contract, the company will execute permanent sustainment modifications on the Space Based Infrared System Survivable Endurable Evolution’s Mobile Ground System. This will allow the ground systems to process Defense Support Program and SBIRS geosynchronous orbit satellites mission data while issuing limited contingency commands to the satellites, whenever required. This modification contract will bring the value of the original contract to $181.1 million. The work on the contract will continue through Jan 31, 2017.

Per the other modification contract, worth $14.4 million, the company will continue to provide logistics support to Iraq's C-130E Hercules transport aircraft for a fourth option year, through Jun 30, 2014. The contract will augment the value of the original contract to $61.6 million.

Meanwhile, in a firm-fixed-price contract extension worth $206.9 million from the DoD, the company will supply additional AN/TPQ-53 radar systems and corresponding spare parts. This will enhance the value of the contract to $605 million.

Recently, Lockheed Martin received a string of DoD contracts totaling $64.4 million. The biggest contract received by the company was valued at $30.3 million for the modification of Mission Avionics Systems and Common Cockpits for MH-60R Sikorsky Seahawk helicopters. The company secured international contract from the Royal Saudi Air Force for the supply of 95 Sniper Advanced Targeting Pods, 70 Infrared Search and Track systems, 35 Compact Multiband Data Link systems, 75 IRST pylons and spare parts. The contract is valued at $21.4 million and is anticipated to be concluded on Dec 31, 2019. The final contract worth $12.7 million calls for supplying 72 retrofit kits, other support equipment as well as spares to modify the F-22’s automatic back up life support system.

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. Also, shareholder return will continue to be shored up by the company’s focus on debt repayment, its ongoing share repurchase program and the incremental dividend.

However, like its peers, The Boeing Company (BA - Analyst Report), Northrop Grumman Corp. (NOC - Analyst Report) and Erickson Air-Crane Inc. (EAC - Snapshot Report), Lockheed Martin continues to face the brunt of defense budget cuts which will limit its operating results. Lockheed presently retains a short-term Zacks Rank #3 (Hold).

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