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Lockheed Wins $44M Navy Deal for Trident II Support Services
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Lockheed Martin Corp.’s (LMT - Free Report) business unit, Space Systems Co., has won a modification contract from the U.S. Navy to offer support services for the production of Trident II (D5) missile and D5 deployed systems.
Contract Details
The contract is valued at $43.9 million. It was awarded by Strategic Systems Programs, Washington, D.C.
Work is scheduled to be complete by Sep 30, 2017. The majority of the work will be performed in Sunnyvale, CA, while the rest will be executed in Cape Canaveral, FL and other locations across the U.S. The contract will use fiscal 2017 operations and maintenance (Navy) funds.
A Brief Note on Trident II (D5)
Trident II (D5) is the latest generation of the Navy's submarine-launched fleet ballistic missiles, developed and produced by Lockheed Martin. It was first deployed in 1990 and is currently aboard the OHIO-class and British VANGUARD-class submarines.
These missiles are equipped with multiple independently targetable reentry vehicles (MIRV) and armed with thermonuclear warheads.
What’s Favoring Lockheed?
Lockheed Martin’s Space Systems Co. is the prime contractor of the Navy's Trident missile. The company also supplies technical and logistical support at sites where the missiles are deployed.
In Sep 2016, the Navy had launched an unarmed Trident II D5 Fleet Ballistic Missile, following which the company announced that it is building on a 60-year partnership with the Navy. The declaration was made to ensure that the missile system remains capable for decades ahead through the company’s shared robust flight test plan.
Naturally, the latest contract is expected to boost the company’s business substantially. It may even attract more of such contracts in the future, given that Trident II (D5) has one of the top priorities in the U.S. Navy’s missile system.
Price Movement
Lockheed Martin’s stock was up about 17.5% in the last one year, underperforming the Zacks categorized Aerospace/Defense industry’s gain of 25.7%. This could be because the earlier budget cuts have put pressure on the top line although the present defense budget is more in favor of the sector. We believe that budget deficits and political uncertainty might make future defense budgets vulnerable to cutbacks. Furthermore, the stock’s performance lagged compared with that of Boeing Co. (BA - Free Report) , General Dynamics Corp. (GD - Free Report) and Huntington Ingalls Industries, Inc. (HII - Free Report) , which surpassed the industry mark.
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Lockheed Wins $44M Navy Deal for Trident II Support Services
Lockheed Martin Corp.’s (LMT - Free Report) business unit, Space Systems Co., has won a modification contract from the U.S. Navy to offer support services for the production of Trident II (D5) missile and D5 deployed systems.
Contract Details
The contract is valued at $43.9 million. It was awarded by Strategic Systems Programs, Washington, D.C.
Work is scheduled to be complete by Sep 30, 2017. The majority of the work will be performed in Sunnyvale, CA, while the rest will be executed in Cape Canaveral, FL and other locations across the U.S. The contract will use fiscal 2017 operations and maintenance (Navy) funds.
A Brief Note on Trident II (D5)
Trident II (D5) is the latest generation of the Navy's submarine-launched fleet ballistic missiles, developed and produced by Lockheed Martin. It was first deployed in 1990 and is currently aboard the OHIO-class and British VANGUARD-class submarines.
These missiles are equipped with multiple independently targetable reentry vehicles (MIRV) and armed with thermonuclear warheads.
What’s Favoring Lockheed?
Lockheed Martin’s Space Systems Co. is the prime contractor of the Navy's Trident missile. The company also supplies technical and logistical support at sites where the missiles are deployed.
In Sep 2016, the Navy had launched an unarmed Trident II D5 Fleet Ballistic Missile, following which the company announced that it is building on a 60-year partnership with the Navy. The declaration was made to ensure that the missile system remains capable for decades ahead through the company’s shared robust flight test plan.
Naturally, the latest contract is expected to boost the company’s business substantially. It may even attract more of such contracts in the future, given that Trident II (D5) has one of the top priorities in the U.S. Navy’s missile system.
Price Movement
Lockheed Martin’s stock was up about 17.5% in the last one year, underperforming the Zacks categorized Aerospace/Defense industry’s gain of 25.7%. This could be because the earlier budget cuts have put pressure on the top line although the present defense budget is more in favor of the sector. We believe that budget deficits and political uncertainty might make future defense budgets vulnerable to cutbacks. Furthermore, the stock’s performance lagged compared with that of Boeing Co. (BA - Free Report) , General Dynamics Corp. (GD - Free Report) and Huntington Ingalls Industries, Inc. (HII - Free Report) , which surpassed the industry mark.
Zacks Rank
Lockheed Martin currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>