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Lockheed Martin Corporation (LMT - Analyst Report) has received a Foreign Military Sale (“FMS”) contract worth $5.1 million to support integration of the Joint Air-to-Surface Standoff Missile (“JASSM”) onto the Finnish Air Force (“FiAF”) F-18C/D aircraft of U.S. Air Force.

Joint Air-to-Surface Standoff Missile is an autonomous, air-to-ground, precision-guided standoff missile. It provides operational flexibility, reliability and effectiveness required by allied warfighters in achieving their goals. It features a penetrator and blast fragmentation warhead that allows it to work autonomously not only on all day and night but in all weather conditions. The missile has the capability to find specific points of targets due to its infrared seeker and enhanced digital anti-jam Global Positioning System (“GPS”). F-18C/D aircraft will be upgraded when JASSM integration will coincide with the FiAF Mid-Life.

The current contract is the first phase of the six-year effort of software development and aircraft integration support. Finland is the second international customer for JASSM. Going forward also, the company expects to receive contracts of integration support, missile procurement and post-production support for remaining phases.

Currently, U.S. Air Force's B-1, B-2, B-52, F-16 and F-15E are supported by JASSM. On an international basis, JASSM is certified on the F/A-18A/B for the Royal Australian Air Force.

Recently, the company received a contract from the U.S. Naval Air Systems command for the integration of new avionics and software on multiple C-130T aircraft. Per the contract, the company will incorporate the Department of Defense’s Future Airborne Capability Environment conformant cockpit and also develop and deliver nine initial cockpit kits that will provide the Navy with the latest avionics and software technology.

This indicates that the company has ample products that are beneficial for the U.S Air Forces. Going forward, we expect the company to benefit from a strong defense focus on a number of its platform programs, such as the C-130 Hercules & C-5 Galaxy transport aircrafts, F-16 Fighting Falcon multi-role jet, MH-60 Helicopters, the Advanced Extremely High Frequency & the GPS III system satellites, the Littoral Combat Ship, the Aegis Weapons System for mobile and sea-based missile defense and the Terminal High Altitude Area Defense system.

Over the longer run, we expect the company to register a stable performance as a result of its leveraged presence in the Army, Air Force, Navy and IT programs. Also, shareholder return will continue to be boosted by the company’s focus on debt repayment, its ongoing share repurchase program and the incremental dividend.

However, U.S. economic fundamentals are basically being kept on a leash as the Euro-crisis continues to cast its spell over financial markets, risking further cutbacks in future defense budgets.

Like its peers General Dynamics Corporation (GD - Analyst Report) and Northrop Grumman Corporation (NOC - Analyst Report), 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 company that is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services.

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