Lockheed Martin Corporation ( LMT - Analyst Report ) has received a sizeable five-year contract worth $1.05 billion from the U.S. Navy to provide digital cockpits and integrated mission systems and sensors for the Navy’s helicopters.

Per the contract, Lockheed will provide 200 digital cockpits and integrated mission systems and sensors for the U.S. Navy’s MH-60R "Romeo" and MH-60S "Sierra" helicopters. The multi-year structure of this contract in comparison to the annual contract helps its customers to save by more then 10% annually.

MH-60R Romeo is an anti-surface and anti-submarine warfare helicopter that is well- designed and has the features of SH-60B and SH-60F. Its sensors include the ASE package, MTS-FLIR, an advanced airborne fleet data link, and more advanced airborne active sonar.

The MH-60S Sierra helicopter is used for ship-to-ship cargo resupply, search and rescue, and close-in defense of Navy ships. It is a hybrid, featuring the main fuselage of the S-70A/UH-60, with large sliding doors on both sides of the cabin and a single aft-mounted tail wheel; and the engines, drive train and rotors of the S-70B/SH-60.

The MH-60S and MH-60R share a common cockpit developed by Lockheed which allows the pilots to switch between the Romeo and Sierra with minimal training.

Both these aircrafts are designed and manufactured by Sikorsky Aircraft, Stratford, Connecticut which is a part of the Defense Systems Group of United Technologies Corporation ( UTX - Analyst Report ) .

Currently, the U.S. Navy crew is operating more than 300 Romeo and Sierra helicopters. The company has been continuously receiving contracts from the U.S. Navy. Last month, the company received a $715 million contract from the Navy for the construction of the third and fourth Littoral Combat Ships under a previous 10-ship contract received in December 2010.

Going forward, we expect the company to register a stable performance due to its leveraged presence in the Army, Air Force, Navy and IT programs. Also, we expect shareholder return will continue to be shored up by the company’s focus on debt repayment, its ongoing share repurchase program and the incremental dividend.

However, we currently remain on the sidelines due to the impact of the Euro-crisis on U.S. economic fundamentals that keeps the risk high for cutbacks in defense budgets.The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

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