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Lockheed (LMT) Secures Navy Contract to Support F-35 Jet Program

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Lockheed Martin Corp. (LMT - Free Report) recently secured a modification contract involving F-35 Joint Strike fighter aircraft. The Naval Air Systems Command, Patuxent River, MD has offered the award.

Details of the Deal

Valued at $12.8 million, the contract is projected to be completed by December 2024. Per the terms of the deal, Lockheed will procure an upgraded automated test equipment system to support the existing F-35 Joint Strike Fighter aircraft depot systems with a Windows 10 configuration.

These efforts are aimed at enhancing functionality, productivity and Department of Defense cyber compliance. Work related to this deal will be carried out in Fort Worth, TX.

Importance of F-35 for LMT

Lockheed Martin enjoys a dominant position in the global military aircraft space with its F-35 fleet. The stealth aircraft boasts features that make it an ideal choice for many nations. Moreover, LMT’s constant efforts to modernize and upgrade the aircraft with advanced technologies and enhance its capabilities to meet current warfare needs boost demand significantly.

The F-35 program remained the largest revenue generator for its Aeronautics business unit and accounted for 68% of Aeronautics’ net sales in 2021.

Lockheed Martin has delivered 841 F-35 airplanes since the program's inception, with 271 jets in backlog till September 2022. This, along with the latest contract win, boosts sales expectations for the Aeronautics business segment.

Lockheed expects to make deliveries of this stealth aircraft in the range of 147-153 jets per year in 2023 and 2024, 156 in 2025 and beyond. This, in turn, should bolster LMT’s revenues significantly from the military aircraft arena.

Growth Prospects

Per Mordor Intelligence projections, the global military aircraft market is expected to witness a CAGR of more than 4% during 2022-2031. Such projections indicate immense opportunities for Lockheed Martin to further reap the benefits of military aircraft market expansion. Other prominent defense majors that are involved in the manufacturing of military aircraft are Northrop Grumman (NOC - Free Report) , Airbus Group (EADSY - Free Report) and Textron (TXT - Free Report) , which are also expected to benefit from the aforementioned market growth projection.

Since its inception, Northrop Grumman has been a pioneer in the development of manned aircraft. From fighter jets and stealth bombers to surveillance and electronic warfare, Northrop Grumman has been providing manned solutions to customers worldwide. It has built some of the world’s most advanced aircraft, ranging from the innovative B-2 Spirit stealth bomber to the game-changing E-2D Advanced Hawkeye.

Its Aeronautics Systems unit is engaged in the design, development, production, integration, sustainment and modernization of advanced aircraft systems, whereas its Mission Systems segment offers advanced mission solutions and multifunction systems like Airborne Early Warning & Control, LONGBOW Fire Control Radar, and Scalable Agile Beam Radar.

Airbus Group’s military aircraft comprises A400M, the C295 tactical transporter, the new-generation A330 Multi Role Tanker Transport and Eurofighter, the most advanced swing-role fighter ever conceived.

Airbus has been providing its aircraft customers with an extended portfolio of services for more than 40 years. Its services range from the training of flight and ground crews to live firing exercises anywhere around the world.
Textron’s military aircraft includes the Beechcraft T-6 training aircraft and the Beechcraft AT-6 light attack aircraft. The company also manufactures the Beechcraft Model 18 light bomber, the T-44 and T-34 training aircraft, and the T-1A jet trainer.

Moreover, its subsidiary, Able Aerospace Services, provides component and maintenance, and repair and overhaul services in support of commercial and military fixed- and rotor-wing aircraft.

Price Movement

Shares of Lockheed have gained 30.3% in the past 12 months against the industry’s decline of 4.5%.

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Zacks Rank

Lockheed currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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