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Lockheed Martin Wins $26M Deal for Supporting F-35 Program
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Lockheed Martin Corp.’s (LMT - Free Report) Aeronautics business unit recently won a $26.2 million contract for providing non-recurring engineering activities associated with the designing, development and integration of the F-35 Autonomic Logistics Information System (ALIS). The contract was awarded by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Additionally, it will also provide testing of the ALIS Sovereign Data Management (SDM) system in support of the Air Force, Marine Corps, Navy and F-35 international partners. This will further grant the company’s international partners the capability to review and block messages to prevent sovereign data loss and improve the security architecture of ALIS.
The deal includes 41% of the purchases made by the U.S. Air Force, 8% by the U.S. Navy, 30% by the U.S. Marine Corps and 21% by the international partners. Work related to the deal will be performed in Fort Worth, TX, and Orlando, FL, which is expected to get completed by June 2020.
What is Autonomic Logistics Information System (ALIS)?
The Autonomic Logistics Information System (ALIS) helps the operators of the F-35 Lightning II aircraft to plan ahead, and maintain and sustain its systems over the life of the air vehicle. ALIS provides the IT backbone and capabilities to support warfighters in the U.S. and allied military services. It integrates a broad range of capabilities including operations, maintenance, prognostics, supply chain, customer support services, training and technical data, and provides users with up-to-date information using web-enabled applications on a distributed network.
The F-35 is the first tactical aviation system to have sustainment tools engineered in concert with the aircraft for efficiency and cost effectiveness. Compared to previous aircraft, a higher fidelity of information about the F-35 fleet is tracked within ALIS to reduce operations and maintenance costs and increase aircraft availability.
What’s Favoring Lockheed Martin?
The F-35 program is Lockheed Martin’s largest program that 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 in the years ahead, 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 the company’s eight international partners, overseas customers and rising demand on a global scale.
Furthermore, the fiscal 2019 defense budget was approved by the U.S. Senate toward the end of June, 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 7.7% in the last year compared with the industry’s growth of 23.1%. 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 & Stocks to Consider
Lockheed Martin currently carries a Zacks Rank #3 (Hold).
A few top-ranked stocks from the same sector are Aerojet Rocketdyne Holdings , Engility Holdings and Huntington Ingalls Industries (HII - Free Report) .
Aerojet Rocketdyne came up with an average positive earnings surprise of 9.27% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 30.9% to $1.27 in the last 90 days.
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.
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 3.8% to $17.25 in the last 90 days.
Looking for Stocks with Skyrocketing Upside?
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Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Lockheed Martin Wins $26M Deal for Supporting F-35 Program
Lockheed Martin Corp.’s (LMT - Free Report) Aeronautics business unit recently won a $26.2 million contract for providing non-recurring engineering activities associated with the designing, development and integration of the F-35 Autonomic Logistics Information System (ALIS). The contract was awarded by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Additionally, it will also provide testing of the ALIS Sovereign Data Management (SDM) system in support of the Air Force, Marine Corps, Navy and F-35 international partners. This will further grant the company’s international partners the capability to review and block messages to prevent sovereign data loss and improve the security architecture of ALIS.
The deal includes 41% of the purchases made by the U.S. Air Force, 8% by the U.S. Navy, 30% by the U.S. Marine Corps and 21% by the international partners. Work related to the deal will be performed in Fort Worth, TX, and Orlando, FL, which is expected to get completed by June 2020.
What is Autonomic Logistics Information System (ALIS)?
The Autonomic Logistics Information System (ALIS) helps the operators of the F-35 Lightning II aircraft to plan ahead, and maintain and sustain its systems over the life of the air vehicle. ALIS provides the IT backbone and
capabilities to support warfighters in the U.S. and allied military services. It integrates a broad range of capabilities including operations, maintenance, prognostics, supply chain, customer support services, training and technical data, and provides users with up-to-date information using web-enabled applications on a distributed network.
The F-35 is the first tactical aviation system to have sustainment tools engineered in concert with the aircraft for efficiency and cost effectiveness. Compared to previous aircraft, a higher fidelity of information about the F-35 fleet is tracked within ALIS to reduce operations and maintenance costs and increase aircraft availability.
What’s Favoring Lockheed Martin?
The F-35 program is Lockheed Martin’s largest program that 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 in the years ahead, 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 the company’s eight international partners, overseas customers and rising demand on a global scale.
Furthermore, the fiscal 2019 defense budget was approved by the U.S. Senate toward the end of June, 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 7.7% in the last year compared with the industry’s growth of 23.1%. 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 & Stocks to Consider
Lockheed Martin currently carries a Zacks Rank #3 (Hold).
A few top-ranked stocks from the same sector are Aerojet Rocketdyne Holdings , Engility Holdings and Huntington Ingalls Industries (HII - Free Report) .
While Aerojet Rocketdyne Holdings sports a Zacks Rank #1 (Strong Buy), Engility Holdings and Huntington Ingalls carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Aerojet Rocketdyne came up with an average positive earnings surprise of 9.27% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 30.9% to $1.27 in the last 90 days.
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.
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 3.8% to $17.25 in the last 90 days.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>