Lockheed Martin On The Move

Lockheed Martin Corporation (LMT - Analyst Report) received a $105 million contract from General Dynamics C4 Systems, a business unit of General Dynamics Corporation (GD - Analyst Report), to produce additional communications equipment for Warfighter Information Network-Tactical (WIN-T) Increment 2.

Additional equipment is being produced for the U.S. Army's high-capacity communications network that brings high-bandwidth, mobile, two-way satellite communications. Under this contract, Lockheed Martin will deliver transmission subsystem radios, modems, antennas and mast systems for integration into a variety of combat vehicle platforms.

The transmission subsystem is the foundation for the WIN-T network's data transfer capability over a highly dispersed, non-contiguous area. Integrating Satellite Communications, line-of-sight and terrestrial waveforms provide high-bandwidth connectivity and helps commanders and the Global Information Grid to be linked with brigade combat teams through an on-the-move broadband networking capability.

General Dynamics’ C4 Systems is the prime contractor for the WIN-T and is teamed with Lockheed Martin, BAE Systems plc (BAESY), Harris Corporation (HRS - Analyst Report) and L-3 Communications (LLL - Analyst Report) on the program.

Lockheed Martin is expected to register a stable performance due to its leveraged presence in the Army, Air Force, Navy and IT programs. Additionally, the company’s focus on debt repayment, its ongoing share repurchase program and the incremental dividend will continue to shore up shareholder return.

However, due to the overhang of defense budget cuts, margin pressures, higher pension liability and risk regarding retrenchment cost recovery, we maintain our long-term Neutral recommendation on the stock. The company also presently retains a short-term Zacks #3 Rank (Hold) rating.

Based in Bethesda, Maryland, Lockheed Martin is a global security company engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services.

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