President-elect Donald Trump’s comments on the Aerospace and Defense sector grabbed headlines last week. Although his criticism of the ‘out of control’ expenses related to The Boeing Company’s (BA Quick QuoteBA - Free Report) Air Force One replacement project surprised many, markets were mostly indifferent. Moreover, yesterday, he declared retired U.S. Marine Corps General James Mattis as his defense secretary of choice, with a promise to fortify the nation’s military strength.

On the other hand, mixed performance at the bourses and a moderate flow of funds from the Pentagon also made its mark. As a result, major indices for the aerospace and defense sector ended in the green last week. While the S&P 500 Aerospace & Defense (Industry) index rose 1.4%, the Dow Jones U.S. Aerospace & Defense Index gained 1.6% in the trailing five trading sessions.

Among last week’s highlights, defense primes Boeing, Lockheed Martin Corp. (LMT Quick QuoteLMT - Free Report) , United Technologies Corp. and BAE Systems plc (BAESY Quick QuoteBAESY - Free Report)  clinched a handful of awards from the U.S. Department of Defense (DoD).

(Read Defense Stock Roundup for Nov 24, 2016 here.)

Recap of the Week’s Most Important Stories

1. Aerospace giant Boeing’s Defense, Space & Security business unit secured a modification contract to upgrade the F-15 Combined APG-63 Version 3 Radar Improvement Program Version 3 and the APG-82 Version 1 Radar Modernization Program (RMP) radar. Valued at $558.5 million, the contract was awarded by the Air Force Life Cycle Management Center, Wright-Patterson Air Force Base, OH.

Per the contract, Boeing will procure, install, supply initial spares and provide support for 42 Version 3, and 29 RMP radars. Notably, APG-63 is an all-weather multimode radar system designed by Raytheon Company for the F-15E air superiority fighter. The APG-63 Version 3 radar offers powerful and adaptable radar technology, with established performance and strategic flexibility, while the APG-82 Version 1 optimizes the F-15E’s multirole mission capability.

Boeing is the sole manufacturer of the F-15. The company has received several contracts from the Pentagon in the past to install the APG-63 Version 3 radar on its F-15C/D jet fighters and the APG-82 radar systems on the F-15E fighter bombers. (Read more: Boeing Unit Wins $559M Air Force Contract to Upgrade Radars)

2. A United Technologies subsidiary, Pratt & Whitney secured a contract for propulsion system services to support the F-35 Joint Strike Fighter aircraft for the U.S. Navy, Air Force, Marine Corps, non-U.S. Department of Defense (DoD) participants and foreign military sales (FMS) customers. Per the contract, the company will offer includes hardware, training course materials and equipment support.

Valued at $309.8 million, this contract was awarded by the Naval Air Systems Command, Patuxent River, MD. Notably, United Technologies serves various end markets including aerospace and defense, which are non-cyclical in nature. This business mix and diversification allows the company to remain profitable even amid tough economic conditions, delivering consistent earnings and dividend growth.

3. United Launch Services, LLC (“ULS”), a subsidiary of Lockheed Martin and Boeing’s joint venture (“JV”) – United Launch Alliance (“ULA”), has won a modification contract from the Air Force for launch vehicle production services (“LVPS”). Valued at $269.2 million, the contract was awarded by the Space and Missile Systems Center, Los Angeles Air Force Base, CA.

Per the contract, ULS will provide the required services for fiscal 2017 LVPS to support the Air Force Delta IV Heavy’s launch vehicle configuration. The modification includes pre-priced contract line items for the Delta IV Heavy LV configuration.

Notably, Delta IV Heavy is one version of the workhorse launcher family of the Delta IV Evolved Expendable Launch Vehicles (EELV). ULA's launch vehicles have played a major role in the U.S. space ventures given its highest commitment to crew safety and mission success. (Read more: Boeing/Lockheed JV Unit Secures $269M Air Force Contract)

4. Pentagon’s largest defense contractor Lockheed Martin’s Aeronautics unit clinched a modification contract to provide two U.S. government-configured C-130J-30 aircraft. Valued at $133.4 million, the deal was awarded by the Air Force Life Cycle Management Center, Wright-Patterson Air Force Base, OH.

The modification includes unclassified foreign military sales (“FMS”) to France. Work is scheduled to be complete by Aug 30, 2020. Notably, the company has been witnessing strong overseas demand for its equipment, which includes the C-130J aircraft, particularly in Asia-Pacific, Europe, and the Middle East.

This has led Lockheed Martin to raise the international mix in its total revenue from 21% in 2016 to 30% for the next few years. C-130J Super Hercules is the latest model in Lockheed Martin’s Hercules family, which boasts the longest continuous production run of a military aircraft in history. (Read more: Lockheed Unit Wins $133M Air Force Deal for C-130J)

Lockheed Martin also won a replenishment spares and incidental services contract worth $67.3 million from the Air Force Life Cycle Management Center, Robins Air Force Base, GA.

Per the deal, Lockheed Martin will provide support for the Sniper Advanced Targeting Pod system, the Low-Altitude Navigation and Targeting Infrared for Night system, and the Infrared Search and Track system. It is part of foreign military sales (FMS) to the Kingdom of Saudi Arabia. (Read more; Lockheed Martin Secures Contract worth $67.3 Million)

Last Week’s Performance

The majority of the prime defense securities put up a mixed show last week. While L-3 Communications Holdings, Inc. gained more than 2% in last five trading sessions, Northrop Grumman Corp (NOC Quick QuoteNOC - Free Report) and Rockwell Collins, Inc. lost around 1%.

However, over the past six months, most of these stocks have scored high returns, with General Dynamics Corp. (GD Quick QuoteGD - Free Report) leading the show, followed by Textron Inc. (TXT Quick QuoteTXT - Free Report) .  

The following table shows the price movement of the major defense players over the past five trading days and the last six months.

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