Lockheed Martin Corp. ( LMT Quick Quote LMT - Free Report) clinched a modification contract involving its F-35 fighter jet program. The award has been offered by the Naval Air Systems Command, Patuxent River, MD. Details of the Deal
Valued at $841.5 million, the contract is expected to be completed by December 2029. Per the terms of the deal, Lockheed will provide non-recurring site activation and initial sustainment to support F-35 Joint Strike Fighter program.
The jet manufacturer will also render associated administrative support including fleet management, support equipment, pilot flight equipment, post ejection survival training material, program management and earned value management for the F-35 program.
A major portion of the work related to this deal will be executed in El Segundo, CA. The contract will serve the U.S. Air Force, Marine Corps, Navy, Foreign Military Sales customers and non-Department of Defense participants.
Importance of F-35 for LMT
Lockheed 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. The company’s constant efforts to modernize and upgrade the aircraft using advanced technologies to meet current warfare needs boost demand significantly.
The F-35 program remained the largest revenue generator for the Aeronautics business unit. It also accounted for 66% of the segment’s net sales in 2022.
Lockheed has delivered 944 F-35 airplanes since the program's inception, with 421 jets in the backlog as of Jun 25, 2023. This, along with the latest contract win, boosts sales expectations for the segment.
Looking ahead, LMT expects to deliver 97 jets in 2023 and more than the earlier projected delivery range of 147-153 in 2024. The jet deliveries for 2025 and beyond are still estimated to be 156. This should bolster the company’s revenues from the military aircraft field.
Per Mordor Intelligence projections, the global military aircraft market is expected to witness a CAGR of 7.37% during the 2023-2028 period. Such projections indicate immense opportunities for Lockheed to reap the benefits of military aircraft market expansion.
Other prominent defense majors involved in the manufacturing of military aircraft are Northrop Grumman ( NOC Quick Quote NOC - Free Report) , Airbus Group ( EADSY Quick Quote EADSY - Free Report) and Textron ( TXT Quick Quote TXT - Free Report) . These stocks are also expected to gain from the market’s growth opportunities.
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, it has been providing manned solutions to customers worldwide. The company 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.
NOC’s Aeronautics Systems unit is engaged in the design, development, production, integration, sustainment and modernization of advanced aircraft systems. Meanwhile, the Mission Systems segment offers advanced mission solutions and multifunction systems like Airborne Early Warning & Control, the LONGBOW Fire Control Radar and the Scalable Agile Beam Radar.
Airbus Group’s military aircraft consists of the A400M, the C295 tactical transporter, the new-generation A330 Multi Role Tanker Transport and the Eurofighter, the most advanced swing-role fighter ever conceived.
The company has been providing its aircraft customers with an extended portfolio of services for more than 40 years, ranging from the training of flight and ground staff 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.
TXT’s subsidiary, Able Aerospace Services, provides component and maintenance, repair and overhaul services in support of commercial and military fixed and rotor-wing aircraft.
Shares of Lockheed have risen 0.3% in the past 12 months against the
industry’s 8.1% decline. Image Source: Zacks Investment Research Zacks Rank
Lockheed currently carries a Zacks Rank #3 (Hold). You can see
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