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Lockheed Martin (LMT) Wins Missile Defense Deal for THAAD
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Lockheed Martin Corp. (LMT - Free Report) has won a modification contract from the Missile Defense Agency to provide support services and develop the Terminal High Altitude Area Defense (“THAAD”) element. The contract was awarded by the Missile Defense Agency, Huntsville, AL.
Contract Details
The contract is valued at $345.6 million. With this modification, the total maximum value of the contract reached $1.34 billion from the previous level of $995.2 million.
Per the modification, Lockheed Martin will exercise an option for additional incremental development, provide support for flight and ground test programs, and offer responsive support to warfighter necessities to uphold the Ballistic Missile Defense System during the acquisition life cycle.
Work will be performed in Sunnyvale, CA and in Huntsville, AL.
A Brief Note on THAAD
The THAAD system is uses a hit-to-kill approach to shoot down short, medium and intermediate ballistic missiles in their terminal phase. It is the only missile defense system with the operational flexibility to intercept in both within and outside the Earth’s atmospheres for providing versatile capability to the warfighter.
Although originally a U.S. Army program, THAAD had come under the umbrella of the Missile Defense Agency.
What’s Favoring Lockheed?
Lockheed Martin’s Space Systems Co. is the prime contractor of THAAD. The company also supplies technical and logistical support at sites where the missiles are deployed.
Lockheed had received a production contract for the first two batteries of THAAD in late 2006. The first THAAD Battery (A-4 ADA Battery) was activated in May 2008 at Fort Bliss, TX, followed by the second THAAD Battery (A-2 ADA Battery) in Oct 2009. Since then, Lockheed Martin has received several contracts from the Missile Defense Agency for the development, support and incorporation of the THAAD system.
The latest contract is expected to boost the company’s business substantially and may even attract more of such contracts in the future, given that THAAD is one of the top priorities in the Pentagon’s missile system.
Price Movement
Lockheed Martin’s stock has improved about 19.4% in the last one year, underperforming the Zacks categorized Aerospace/Defense industry’s gain of 26.9%. This could be because the earlier cuts have put pressure on the top line although the present defense budget is more in favor of the sector. Budget deficits and political uncertainty make future defense budgets vulnerable to cutbacks. As a result, Lockheed Martin’s performance lagged behind the likes of General Dynamics Corp. (GD - Free Report) , Textron, Inc. (TXT - Free Report) and Huntington Ingalls Industries, Inc. (HII - Free Report) , who have all outperformed the industry.
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Lockheed Martin (LMT) Wins Missile Defense Deal for THAAD
Lockheed Martin Corp. (LMT - Free Report) has won a modification contract from the Missile Defense Agency to provide support services and develop the Terminal High Altitude Area Defense (“THAAD”) element. The contract was awarded by the Missile Defense Agency, Huntsville, AL.
Contract Details
The contract is valued at $345.6 million. With this modification, the total maximum value of the contract reached $1.34 billion from the previous level of $995.2 million.
Per the modification, Lockheed Martin will exercise an option for additional incremental development, provide support for flight and ground test programs, and offer responsive support to warfighter necessities to uphold the Ballistic Missile Defense System during the acquisition life cycle.
Work will be performed in Sunnyvale, CA and in Huntsville, AL.
A Brief Note on THAAD
The THAAD system is uses a hit-to-kill approach to shoot down short, medium and intermediate ballistic missiles in their terminal phase. It is the only missile defense system with the operational flexibility to intercept in both within and outside the Earth’s atmospheres for providing versatile capability to the warfighter.
Although originally a U.S. Army program, THAAD had come under the umbrella of the Missile Defense Agency.
What’s Favoring Lockheed?
Lockheed Martin’s Space Systems Co. is the prime contractor of THAAD. The company also supplies technical and logistical support at sites where the missiles are deployed.
Lockheed had received a production contract for the first two batteries of THAAD in late 2006. The first THAAD Battery (A-4 ADA Battery) was activated in May 2008 at Fort Bliss, TX, followed by the second THAAD Battery (A-2 ADA Battery) in Oct 2009. Since then, Lockheed Martin has received several contracts from the Missile Defense Agency for the development, support and incorporation of the THAAD system.
The latest contract is expected to boost the company’s business substantially and may even attract more of such contracts in the future, given that THAAD is one of the top priorities in the Pentagon’s missile system.
Price Movement
Lockheed Martin’s stock has improved about 19.4% in the last one year, underperforming the Zacks categorized Aerospace/Defense industry’s gain of 26.9%. This could be because the earlier cuts have put pressure on the top line although the present defense budget is more in favor of the sector. Budget deficits and political uncertainty make future defense budgets vulnerable to cutbacks. As a result, Lockheed Martin’s performance lagged behind the likes of General Dynamics Corp. (GD - Free Report) , Textron, Inc. (TXT - Free Report) and Huntington Ingalls Industries, Inc. (HII - Free Report) , who have all outperformed the industry.
Zacks Rank
Lockheed Martin currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>