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Lockheed Martin Wins $302M Deal for F-35 Lightning Program
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Lockheed Martin Corp.’s (LMT - Free Report) Aeronautics business division recently won a $302 million contract for delivering ancillary mission equipment to support low rate initial production (LRIP) of the 12th lot of F-35 Lightning II jets. This deal will cater the U.S. Air Force, Marine Corps, Navy, non-Department of Defense (DoD) participants and foreign military sales (FMS) customers.
Details of the Deal
The contract was awarded by the Naval Air Systems Command, Patuxent River, MD. It includes 36% of the work for the U.S. Air Force; 3% for the U.S. Navy; 17% for the U.S. Marine Corps; 34% for the non-DoD participants and 10% for FMS customers. Work related to the deal will be performed in Fort Worth, TX and is expected to get completed by January 2021.
Lockheed Martin will utilize 2016 aircraft procurement (Air Force), fiscal 2018 aircraft procurement (Air Force, Navy and Marine Corps), non-DoD participant and FMS funds for completing the task.
Benefits of F-35 Lightning Program
The F-35 Lightning is a supersonic, multi-role fighter jet, which represents a quantum leap in air-dominance capability offering enhanced lethality and survivability in hostile, anti-access airspace environments. Its advanced stealth allows pilots to penetrate into areas without being detected by enemy radars. It is being used by the defense forces of the United States and 11 other nations, worldwide, largely due to its advanced stealth, integrated avionics, sensor fusion, superior logistics support and powerful integrated sensors capabilities.
What’s Favoring Lockheed Martin?
The F-35 program is Lockheed Martin’s largest program, which generated 27% of its total consolidated net sales in second-quarter 2018. Moreover, the company’s Aeronautics division generated solid year-over-year revenue growth of 8.1%, primarily driven by higher net sales of approximately $370 million for the F-35 program. Considering the latest contract win, we may expect the Aeronautics unit to reflect similar solid performance in the third quarter as well.
Moreover, production of F-35 is expected to rise given the U.S. government’s current inventory objective of 2,456 aircraft for the Air Force, Marine Corps and Navy along with commitments from eight international partners, overseas customers and rising global demand.
Furthermore, the fiscal 2019 defense budget was approved by the U.S. Senate this July, which provisioned for a spending plan of $21.7 billion on aircraft. The budget proposal hints at a prospective increase in Lockheed Martin’s F-35 Joint Strike Fighter program that has been allotted $10.7 billion along with additional funding for the procurement of 97 F-35 Joint Strike Fighters. Evidently, these developments reflect solid growth prospects for Lockheed Martin’s F-35 program going ahead, which, in turn, are likely to boost the company’s profit margin.
Price Movement
Lockheed Martin’s stock has improved about only 1.8% in the last year compared with the industry’s growth of 18.9%. The underperformance may have been caused by the intense competition that the company faces in the aerospace-defense space for its broad portfolio of products and services, both domestically as well as internationally.
Zacks Rank & Other Stocks to Consider
Lockheed Martin currently carries a Zacks Rank #2 (Buy).
Engility Holdings delivered an average positive earnings surprise of 19% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 18.9% to $2.02 in the last 90 days.
Textron came up with an average positive earnings surprise of 20.44% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 5.75% to $3.31 in the last 90 days.
Huntington Ingalls Industries came up with an average positive earnings surprise of 9.48% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 2.17% to $16.98 in the last 90 days.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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Lockheed Martin Wins $302M Deal for F-35 Lightning Program
Lockheed Martin Corp.’s (LMT - Free Report) Aeronautics business division recently won a $302 million contract for delivering ancillary mission equipment to support low rate initial production (LRIP) of the 12th lot of F-35 Lightning II jets. This deal will cater the U.S. Air Force, Marine Corps, Navy, non-Department of Defense (DoD) participants and foreign military sales (FMS) customers.
Details of the Deal
The contract was awarded by the Naval Air Systems Command, Patuxent River, MD. It includes 36% of the work for the U.S. Air Force; 3% for the U.S. Navy; 17% for the U.S. Marine Corps; 34% for the non-DoD participants and 10% for FMS customers. Work related to the deal will be performed in Fort Worth, TX and is expected to get completed by January 2021.
Lockheed Martin will utilize 2016 aircraft procurement (Air Force), fiscal 2018 aircraft procurement (Air Force, Navy and Marine Corps), non-DoD participant and FMS funds for completing the task.
Benefits of F-35 Lightning Program
The F-35 Lightning is a supersonic, multi-role fighter jet, which represents a quantum leap in air-dominance capability offering enhanced lethality and survivability in hostile, anti-access airspace environments. Its advanced stealth allows pilots to penetrate into areas without being detected by enemy radars. It is being used by the defense forces of the United States and 11 other nations, worldwide, largely due to its advanced stealth, integrated avionics, sensor fusion, superior logistics support and powerful integrated sensors capabilities.
What’s Favoring Lockheed Martin?
The F-35 program is Lockheed Martin’s largest program, which generated 27% of its total consolidated net sales in second-quarter 2018. Moreover, the company’s Aeronautics division generated solid year-over-year revenue growth of 8.1%, primarily driven by higher net sales of approximately $370 million for the F-35 program. Considering the latest contract win, we may expect the Aeronautics unit to reflect similar solid performance in the third quarter as well.
Moreover, production of F-35 is expected to rise given the U.S. government’s current inventory objective of 2,456 aircraft for the Air Force, Marine Corps and Navy along with commitments from eight international partners, overseas customers and rising global demand.
Furthermore, the fiscal 2019 defense budget was approved by the U.S. Senate this July, which provisioned for a spending plan of $21.7 billion on aircraft. The budget proposal hints at a prospective increase in Lockheed Martin’s F-35 Joint Strike Fighter program that has been allotted $10.7 billion along with additional funding for the procurement of 97 F-35 Joint Strike Fighters. Evidently, these developments reflect solid growth prospects for Lockheed Martin’s F-35 program going ahead, which, in turn, are likely to boost the company’s profit margin.
Price Movement
Lockheed Martin’s stock has improved about only 1.8% in the last year compared with the industry’s growth of 18.9%. The underperformance may have been caused by the intense competition that the company faces in the aerospace-defense space for its broad portfolio of products and services, both domestically as well as internationally.
Zacks Rank & Other Stocks to Consider
Lockheed Martin currently carries a Zacks Rank #2 (Buy).
A few similar-ranked stocks in the same space are Engility Holdings , Textron (TXT - Free Report) and Huntington Ingalls Industries (HII - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Engility Holdings delivered an average positive earnings surprise of 19% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 18.9% to $2.02 in the last 90 days.
Textron came up with an average positive earnings surprise of 20.44% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 5.75% to $3.31 in the last 90 days.
Huntington Ingalls Industries came up with an average positive earnings surprise of 9.48% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 2.17% to $16.98 in the last 90 days.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>