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Defense Stock Roundup: Lockheed Martin, General Dynamics Score Big Wins

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A consistent flow of funds from the Pentagon has kept defense stocks buoyant over the trailing five trading sessions. As a result, major indices of the aerospace and defense industry ended in the green. Notably, the S&P 500 Aerospace & Defense (Industry) and the Dow Jones U.S. Aerospace & Defense indices rose 2% in the past five trading sessions.

Among the last week’s highlights, defense majors namely Lockheed Martin Corp. (LMT - Free Report) , General Dynamics Corp. (GD - Free Report) , The Boeing Company (BA - Free Report) and Huntington Ingalls Industries, Inc. (HII - Free Report) secured number of notable deals from the Department of Defense’s daily funding session.

Recap of Past Week’s Important Stories

1. Lockheed Martin clinched a $7.2-billion contract for the construction of 22 next-generation Global Positioning System (GPS) III satellites. The contract was awarded by the U.S. Air Force.

The GPS 3 satellites will be built at the company's Waterton campus in the Denver suburb of Littleton. Meanwhile, Lockheed Martin is constructing 10 GPS III satellites for the Air Force, under a previous contract (read more:Lockheed Martin Wins $7.2B GPS Satellite Deal From Air Force).

The company’s Rotary and Mission Systems business unit also won a $132.3-million modification contract for providing engineering services to the AN/BVY-1 Integrated Submarine Imaging System. Majority of the work related to the deal will be performed in Manassas, Virginia and Syracuse, NY.

The contract was awarded by the Naval Sea Systems Command, Washington, DC and is expected to get completed by September 2022 (read more: Lockheed Martin Wins $132M Deal for Supporting AN/BVY-1 ISIS).

2. General Dynamics’ Electric Boat division clinched a $480.6-million modification contract for Columbia-class fleet ballistic missile submarines. The deal was awarded by the Naval Sea Systems Command, Washington, DC.

Per the terms of the agreement, General Dynamics will conduct advance procurement and construction of its lead ship for fiscal 2019 and 2020 to support the Columbia-class fleet ballistic missile submarines. Work related to the deal will be performed in Quonset, RI; Newport News, VA; and Groton, CT(read more: General Dynamics Wins $481M Submarine Deal From U.S. Navy).

3. Boeing won a $194.5-million modification contract for production concurrency upgrades of P-8A Aircrew Training System to support the U.S. Navy and the Australian government. The contract was awarded by the Naval Air Warfare Center Training Systems Division, Orlando, FL.The entire task related to the deal is expected to be completed by September 2023 (read more: Boeing Wins $195M Navy Deal for P-8A Training Systems).

This apart, the company clinched another contract worth $168 million for delivering depot-level reparable pertaining to F/A-18 aircraft. The deal, which includes one five-year option period, was awarded by the Defense Logistics Agency Aviation, Philadelphia, PA.

Work related to this dealis scheduled to be over by Jul 1, 2027 and will be carried out in St. Louis, MI (read more: Boeing Secures $168M Deal to Deliver F/A-18 Jets' Reparables).

4. Huntington Ingalls secured a modification contract worth $104.3 million related to nuclear submarines. Per the terms of the deal, the company will provide engineering, technical, design, configuration management and integrated logistics support, database management, research and development, modernization and industrial support to the submarines.

The contract was awarded by the Naval Sea Systems Command, Washington, D.C. Work related to the deal is expected to be completed by September 2019 (read more: Huntington Ingalls Secures $104M Deal to Upgrade Submarines).

Performance

Over the past five trading sessions, defense biggies put up a mixed show. Boeing gained the most with its share price rising 3.4%, while Lockheed Martin and Northrop Grumman suffered a decline.

The industry's performance over the last six months has been mixed as well. Textron gained the most this time with its share price rising more than 19%, while Northrop lost 13%.

The following table shows the price movement of the major defense players over the past five trading days and during the last six months.

The following table shows the price movement of the major defense players over the past five trading days and during the last six months.

CompanyLast WeekLast 6 Months
LMT-0.80%-0.74%
BA3.38%8.84%
GD2.16%-9.99%
RTN-0.01%-5.75%
NOC-0.66%-13.28%
COL1.56%3.90%
TXT1.33%19.74%
LLL-1.63%1.73%

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