Lockheed Martin Corporation’s (LMT Quick QuoteLMT - Free Report) business unit, Aeronautics, recently clinched a modification contract involving the procurement of long lead parts for F-35 jets. The deal has been awarded by the Naval Air Systems Command, Patuxent River, MD.

Valued at $49.9 million, the contract is expected to conclude by July 2024. The latest modification has been made to ensure that the F-35 developmental test aircraft maintains full mission capable status.

 

The contract will serve the U.S. Navy, Marine Corps, Air Force, and non-U.S. Department of Defense participants.

 

Work related to this deal will be executed in Fort Worth, TX.

The F-35 program enjoys a solid demand worldwide, as evidenced by its eight international program partners — the United States, the U.K., Italy, the Netherlands, Australia, Norway, Denmark and Canada. Additionally, it has six Foreign Military Sales customers that are procuring and operating the F-35, namely Israel, Japan, South Korea, Poland, Belgium and Singapore. This reflects the growing importance of this family of jets globally.

 

In July 2021, the Swiss Federal Council announced that it has selected Lockheed Martin's F-35 Lightning II as its new fighter aircraft. With this selection, Switzerland became the 15th nation to join the F-35 program.

 

Such developments will aid the United States to continue dominating the combat aircraft space, which in turn will boost LockheedMartin'stop-line performance in the days ahead.

Countries globally have been reinforcing their military resources due to intense geo-political tensions and amplified terrorist threats. This has spurred the demand for combat aircraft. In this context, it is imperative to mention that the F-35 enjoys a leading position in the combat aircraft market. Consequently, Lockheed Martinwitnesses a strong inflow of contracts from the Pentagon and other U.S allies. The latest contract win is a testament to that.

 

Prior to this contract, in September, Aeronautics clinched a $6.6 billion contract involving the sustainment of its global F-35 fleet. Interestingly, such contract wins should continue to drive Lockheed Martin’s topline going ahead.In fact, the U.S government has a current inventory target of 2,456 aircraft for the Air Force, Marine Corps and Navy. Thus, the company is likely to continue seeing a solid inflow of contracts for the stealth aircraft.

 

Moreover, the U.S. fiscal 2022 defense budget has allocated $12 billion for 85 F-35 Joint Strike Fighters. To this end, it is imperative to mention that such budget allocation will not only benefit Lockheed Martin but also Northrop Grumman (NOC Quick QuoteNOC - Free Report) , BAE Systems (BAESY Quick QuoteBAESY - Free Report) and Pratt & Whitney, a unit of Raytheon Technologies (RTX Quick QuoteRTX - Free Report) as these are leading supporters of F-35 Joint Strike Fighters production. While Northrop Grumman and BAE Systems supply components for mission systems and airframe, Pratt & Whitney offers its combat-proven engine to this jet.

In the past one year, shares of Lockheed have lost 10% against the industry’s growth of 7%.

 

Lockheed Martin currently carries a Zacks Rank #4 (Sell).

 

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