United Launch Services, LLC or ULS, jointly owned by The Boeing Company (BA - Analyst Report) and Lockheed Martin Corporation (LMT - Analyst Report) , has won a contract, worth approximately $1.1 billion or $1,088 million, from the U.S. Department of Defense (DoD). Per the agreement, the company will provide launch vehicle configurations support to the U.S. Air Force (AF) and the National Reconnaissance Organization (NRO) under the Evolved Expendable Launch Vehicle (EELV) production services.
ULS will configure several launch vehicles, including AF Atlas V 401, AF Atlas V 501, AF Delta IV 4,2, AF Delta IV 5,4, NRO Atlas 401, NRO Atlas 541, and a NRO Delta IV 5,2. This activity will take place in Centennial, Colo. and is scheduled to be completed by 2015.
ULS is a subsidiary of United Launch Alliance, LLC, a 50-50 joint venture between Boeing and Lockheed Martin. United Launch Alliance offers U.S. affordable, consistent, and assured access to space for U.S. government missions. It has three launch vehicles – Atlas V, Delta IV and Delta II.
EELV program, a U.S. AF’s space lift modernization program, was incorporated in 1994 to make space launch vehicles more cost-effective and reliable. The program is replacing the existing fleets with two families of launch vehicles - the Boeing Delta IV and Lockheed Martin Atlas V. With the utilization of this effort, the cost of launch of the Atlas, Delta and Titan space launch systems is expected to be reduced by 25%.
ULS has a long-standing business association with the U.S. defense establishments and tries to meet its commitments in terms of maintaining products and services standard along with delivery timing. In Apr 2013, ULS received a contract, worth $16.9 million, from the DoD to provide EELV launch capability services. Steady flow of contracts will enable the company to improve its forthcoming results.
Currently, Boeing and Lockheed Martin have a Zacks Rank #2 (Buy) and a Zacks Rank #3 (Hold), respectively. Other stocks from the sector that are presently performing well include Alliant Techsystems Inc. and Exelis, Inc. with a Zacks Rank #2 (Buy).