Lockheed Martin Corporation (LMT - Analyst Report) was given a $54.4 million cost-plus-fixed-fee contract modification for the Long Range Anti-Ship Missile (LRASM) program. LRASM is an anti-ship missile being developed for the US Navy. The Defense Advanced Research Projects Agency or DARPA is the contracting activity.

As part of the LRASM demonstration program, Lockheed Martin will conduct additional surface-launch risk-reduction work prior to two planned flight demonstrations from a representative vertical launching system canister. LRASM is a joint DARPA/Office of Naval Research effort to develop and demonstrate standoff anti-ship strike weapon technologies. Work on the contract will be performed in Orlando, Fla., (84.13%), Baltimore, Md. (14.24%), and Walled Lake, Mich. (1.63%). The work on the contract is expected to be completed by Dec 31, 2014.

LRASM is designed to be compatible with the vertical launch system used on many US Navy ships and to be fired from an aircraft. The U.S. Navy is also upgrading its vertical launch systems for better efficiency. Raytheon Company (RTN - Analyst Report) in conjugation with the U.S. Navy is developing the MK 57 Advanced Vertical Launching System, the next-generation naval missile launching system for future surface combatants of the U.S. Navy.

Lockheed Martin is the largest U.S. defense contractor with a platform-centric focus and a steady inflow of follow-on orders due to its leveraged presence in the Army, Air Force, Navy and IT programs. However, the ongoing trend of governmental delays in program decisions and even program cancellations have affected the fortunes of the defense industry in general and Lockheed Martin in particular.

Lockheed Martin finished 2012 with $82.3 billion of order backlog, including $19.8 billion of new orders booked in the fourth quarter. Of this $30.1 billion belonged to the Aeronautics segment and $18.1 billion to the Space Systems segment. The rest is made up of $14.7 billion for the Missiles and Fire Control segment; $10.7 billion for Mission Systems and Training; and $8.7 billion for the Information Systems & Global Solutions.

Lockheed Martin is a Zacks Rank #2 (Buy) stock. The past 60 days have seen 12 of the 13 earnings estimates for full year 2013 moving up despite an industry-wide threat of budget cutbacks and effects of sequestration.

In the aerospace and defense industry we also prefer other Zacks Rank #2 (Buy) stocks like The Boeing Company (BA - Analyst Report) and FLIR Systems, Inc. (FLIR - Analyst Report).