We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Lockheed Martin Wins $20M Navy Deal for Work on F-35 Lot 15
Read MoreHide Full Article
Lockheed Martin Corp.’s (LMT - Free Report) business unit, Aeronautics, has won a modification contract from the U.S. Navy to procure work on the aircraft memory system and panoramic cockpit display. This work will help to recover diminishing manufacturing sources limitations that are projected under 15th Lot production of F-35.
Contract Details
The contract is valued at $19.8 million. It was awarded by Naval Air Systems Command, Patuxent River, MD.
The modification includes 40% of the work for the Air Force; 20% for the Navy, Marine Corps and international partners each.
Work is scheduled to be completed by Mar 2019 and will be performed in Fort Worth, TX. The contract will use fiscal 2016 research, development, test and evaluation (Air Force, Navy, Marine Corps); and international partners funds.
F-35 Attributes
Lockheed Martin’s F-35 Lightning II is a single-seat, single-engine 5th Generation fighter aircraft, which comes with an advanced stealth feature combined with enhanced fighter speed and agility, fully fused sensor information, network-enabled operations and advanced sustainment. Three variants of F-35 are set to replace five fighter jets for the U.S. Air Force, Navy and Marine Corps as well as a variety of fighter jets for at least ten other countries.
With Lockheed Martin being the primary partner, the F-35 program has been supported by an international team of leading aerospace majors. Notably, Northrop Grumman Corp. (NOC - Free Report) contributed its expertise in carrier aircraft and low-observable stealth technology to this program, BAE Systems plc’s (BAESY - Free Report) short takeoff and vertical landing experience, and air systems sustainment supported the jet’s combat capabilities. Moreover, Pratt & Whitney, a unit of United Technologies Corporation , provided F-35s with the F135 propulsion system, which is the world's most powerful fighter engine.
Our View
F-35 is the world's largest defense program built by some of the leading companies in the aerospace-defense space. Till date, the U.S. government has awarded low-rate initial production contracts for smaller batches of F-35 jets, partly because of the huge costs associated with it.
Notably, in spite of gaining considerable traction across the globe for providing superior air security and stability; the F-35 program has been grappling with some technical challenges over the past few years. It is imperative to mention in this context that although this jet’s engine has led to a few delays, it was announced that engine removal for maintenance – a key measure of engine reliability – is over 90% and hence is not required until 2020.
In terms of price, F-35 was criticized by President Trump who has been repeatedly tagging this project as “overtly expensive”. Toward this end, in Jan 2017, Trump claimed that his intervention has forced the company to slash the cost of 10th batch F-35 jets by $600 million. Although Lockheed Martin’s management never confirmed to this proclamation, in Dec 2016 it had announced plans to cut down cost by $550−$630 million or in the range of 6–7%.
Finally, in February, the company won a DoD contract worth $8.5 billion for the production of 90 F-35 fighters of the 10th batch at a lowest price to date, when compared to this program’s prior contract value. This indicates that Lockheed Martin has eventually acted on the cost-cut plans for F-35 as proposed by the President. In fact, later in March, the company’s CEO Hewson also admitted that President Trump’s persistent involvement in cutting cost of F-35 did have a major influence on this program’s cost-saving initiative.
One may expect that such cost reductions might hurt the company’s growth trajectory. However, considering the factors that are expected to favor Lockheed Martin, it is unlikely that the world’s largest defense contractor will suffer any setback, at least in the long term. We note that the company expects to increase its delivery of F-35 jets by over 40% year over year in 2017. Also, it plans to cut sustainment costs for F-35 by $1 billion over next five years, besides the U.S. government plans to spend approximately $400 billion in the upcoming decades to develop and purchase 2,443 F-35 jets. We believe these moves are likely to benefit the company over the long haul.
Price Movement
Lockheed Martin’s stock was up about 18.1% 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.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Lockheed Martin Wins $20M Navy Deal for Work on F-35 Lot 15
Lockheed Martin Corp.’s (LMT - Free Report) business unit, Aeronautics, has won a modification contract from the U.S. Navy to procure work on the aircraft memory system and panoramic cockpit display. This work will help to recover diminishing manufacturing sources limitations that are projected under 15th Lot production of F-35.
Contract Details
The contract is valued at $19.8 million. It was awarded by Naval Air Systems Command, Patuxent River, MD.
The modification includes 40% of the work for the Air Force; 20% for the Navy, Marine Corps and international partners each.
Work is scheduled to be completed by Mar 2019 and will be performed in Fort Worth, TX. The contract will use fiscal 2016 research, development, test and evaluation (Air Force, Navy, Marine Corps); and international partners funds.
F-35 Attributes
Lockheed Martin’s F-35 Lightning II is a single-seat, single-engine 5th Generation fighter aircraft, which comes with an advanced stealth feature combined with enhanced fighter speed and agility, fully fused sensor information, network-enabled operations and advanced sustainment. Three variants of F-35 are set to replace five fighter jets for the U.S. Air Force, Navy and Marine Corps as well as a variety of fighter jets for at least ten other countries.
With Lockheed Martin being the primary partner, the F-35 program has been supported by an international team of leading aerospace majors. Notably, Northrop Grumman Corp. (NOC - Free Report) contributed its expertise in carrier aircraft and low-observable stealth technology to this program, BAE Systems plc’s (BAESY - Free Report) short takeoff and vertical landing experience, and air systems sustainment supported the jet’s combat capabilities. Moreover, Pratt & Whitney, a unit of United Technologies Corporation , provided F-35s with the F135 propulsion system, which is the world's most powerful fighter engine.
Our View
F-35 is the world's largest defense program built by some of the leading companies in the aerospace-defense space. Till date, the U.S. government has awarded low-rate initial production contracts for smaller batches of F-35 jets, partly because of the huge costs associated with it.
Notably, in spite of gaining considerable traction across the globe for providing superior air security and stability; the F-35 program has been grappling with some technical challenges over the past few years. It is imperative to mention in this context that although this jet’s engine has led to a few delays, it was announced that engine removal for maintenance – a key measure of engine reliability – is over 90% and hence is not required until 2020.
In terms of price, F-35 was criticized by President Trump who has been repeatedly tagging this project as “overtly expensive”. Toward this end, in Jan 2017, Trump claimed that his intervention has forced the company to slash the cost of 10th batch F-35 jets by $600 million. Although Lockheed Martin’s management never confirmed to this proclamation, in Dec 2016 it had announced plans to cut down cost by $550−$630 million or in the range of 6–7%.
Finally, in February, the company won a DoD contract worth $8.5 billion for the production of 90 F-35 fighters of the 10th batch at a lowest price to date, when compared to this program’s prior contract value. This indicates that Lockheed Martin has eventually acted on the cost-cut plans for F-35 as proposed by the President. In fact, later in March, the company’s CEO Hewson also admitted that President Trump’s persistent involvement in cutting cost of F-35 did have a major influence on this program’s cost-saving initiative.
One may expect that such cost reductions might hurt the company’s growth trajectory. However, considering the factors that are expected to favor Lockheed Martin, it is unlikely that the world’s largest defense contractor will suffer any setback, at least in the long term. We note that the company expects to increase its delivery of F-35 jets by over 40% year over year in 2017. Also, it plans to cut sustainment costs for F-35 by $1 billion over next five years, besides the U.S. government plans to spend approximately $400 billion in the upcoming decades to develop and purchase 2,443 F-35 jets. We believe these moves are likely to benefit the company over the long haul.
Price Movement
Lockheed Martin’s stock was up about 18.1% 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.
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.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>