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Triumph Group Inks Deal for F-35 Components with Lockheed

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Triumph Group, Inc. (TGI - Free Report) has signed long-term agreements with Lockheed Martin Corp. (LMT - Free Report) for supplying key engine and structures components for the F-35 Lightning II aircraft.

Per the agreement, Triumph will supply engine mounts, bulkheads, longerons and wing ribs for Lockheed Martin’s F-35. The supply agreement will run through 2021. The latest agreements are expected to drive organic growth of the company.

Note that Lockheed Martin has awarded a number of contracts to one of Triumph’s business units, Precision Components (“TPC”), so far this year. The latest contract is proof of a strong alliance between TPC and Lockheed Martin. In 2015, TPC performed remarkably on similar statements of work, indicating the unit’s range of machining solutions, along with a higher level of assembly potential. This could have spurred Lockheed to select TPC for the latest agreement too.

At present, Triumph provides structural components and systems for other models of the F-35, including hydraulic valves, the drag chute actuator (for Norwegian F-35s) and the holdback bar for the F-35C.
 

According to Rick Rosenjack, executive vice president of TPC, the company’s ability to provide quick movement as well as to meet delivery requirements demonstrate its potential in offering innovative solutions to customers. He added that with the latest contract, the company would be able to prove its potential of competing on higher-level subassemblies.

Triumph follows a systematic organic and inorganic growth strategy to expand its scale of operations. The company’s organic growth has been reasonably strong based on the addition of products and services, expansion of operating capacity and marketing of a complete product portfolio.

Triumph Group carries a Zacks Rank #3 (Hold).

Stocks to Consider

A couple of better-ranked stocks in the aerospace/defense equipment industry include Rockwell Collins Inc. and Raytheon Company , both carrying a Zacks Rank #2 (Buy).

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