Lockheed Martin Corp. ( LMT Quick Quote LMT - Free Report) recently secured a modification contract for providing continued services to support integration of Foreign Military Sales (FMS) customers into the F-35 Lightning II Joint Strike Fighter program. The award has been offered by the Naval Air Systems Command, Patuxent River, MD. Details of the Deal
Valued at $137.7 million, the contract is expected to be completed in July 2021. The services to be provided by Lockheed will include program management, non-recurring unique requirements and training.
Majority of work related to the deal will be carried out in Fort Worth, TX.
Rise in Demand Aids F-35 Program
The rise in global terrorism and adverse geopolitical situations has increased the need for enhancing the nation's defense budget, a major portion of which is allocated to combat aircraft. The F-35 program is supported by an international team of leading aerospace majors, such as
Northrop Grumman ( NOC Quick Quote NOC - Free Report) , BAE Systems ( BAESY Quick Quote BAESY - Free Report) and Pratt & Whitney, a unit of Raytheon Technologies ( RTX Quick Quote RTX - Free Report) . Notably, Northrop Grumman rendered its expertise in carrier aircraft and low-observable stealth technology to this program. Also, BAE Systems’ short takeoff and vertical landing experience, and air systems sustainment supported the jet’s combat capabilities. Pratt & Whitney offered its combat-proven engine to this jet.
Such features have enabled the F-35 jet to dominate the combat aircraft market, buoyed by solid demand as is evident from the frequent contract wins involving F-35 program and its associated upgrades, both from Pentagon and other U.S. allies. The latest contract win is a bright example of that.
As of Mar 28, 2021, Lockheed Martin delivered 628 F-35 airplanes since the program's inception with 339 jets still in backlog. This surely boosts sales expectation for the Aeronautics business segment in the coming days.
Moreover, the production of F-35 jets is expected to continue for many years, given the U.S. government's current inventory target of 2,456 aircraft for the Air Force, Marine Corps and Navy. Consequently, we expect Lockheed Martin to witness more order inflows for F-35 and its associated upgrades, like the latest one, which in turn should bolster this defense contractor’s top line.
Price Movement and Zacks Rank
Shares of this Zacks Rank #3 (Hold) company have lost 4.9% in the past year against the
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