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Lockheed (LMT) Secures a Contract to Support H-60 Helicopters
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Lockheed Martin Corp.’s (LMT - Free Report) Rotary and Mission Systems (“RMS”) business segment recently clinched a contract involving its H-60 helicopters. The award has been offered by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $86.9 million, the contract is expected to be completed by March 2029. Per the terms of the deal, Lockheed will provide sustainment engineering and logistics services support for all types/models/series of H-60 helicopters.
The contract will serve the U.S. Navy, along with the governments of Australia, Denmark, Saudi Arabia, South Korea, Greece, India and Spain. Work related to this deal will be executed in Owego, NY.
What’s Favoring Lockheed?
Lockheed’s H-60 fleet of Black Hawk multirole helicopters serves the U.S. military and the armed forces of 34 other countries worldwide. With digital avionics, powerful GE engines, high-strength airframe structures and composite wide chord rotor blades, today’s BLACK HAWK platform has better survivability and situational awareness. It can also fly higher and carry more than its predecessors.
The advanced weapon system for BLACK HAWK helicopters allows pilots to identify and engage static or moving targets with forward-firing guns, rockets and laser-designated air-to-ground missiles.
Such remarkable features of this helicopter must have resulted in solid order flows for Lockheed, like the latest one.
The fact that more than 4,000 BLACK HAWK aircraft of all types are in service worldwide reflects the solid demand that LMT’s H-60 helicopters enjoy in the combat helicopter market. Backed by such solid demand, we may expect LMT to win more similar contracts in the coming days, which in turn should boost its revenue growth from the RMS unit.
Growth Prospects
U.S. military helicopters have been gaining prominence and significant traction of late, due to advancements and integration of new tactical, logistical and other important features. With Lockheed being a renowned combat helicopter manufacturer, such a trend has set the stage for this defense contractor to win helicopter delivery and associated service contracts frequently from the Pentagon and other U.S. allies. The recent contract win is a bright example of that.
Looking ahead, rising geopolitical and cross-border conflicts across the globe have forced nations to increase their defense spending toward procuring new aircraft and helicopters to enhance their aerial capabilities. Per a report from Mordor Intelligence, the military rotorcraft market is likely to witness a CAGR of more than 4% during the 2024-2029 period.
This should significantly boost Lockheed, as the company enjoys a dominant position in the military helicopter market with its portfolio containing combat-proven programs like Black Hawk, MH-60R Seahawk, HH-60W Combat Rescue, CH-148 Cyclone, S-97 Raider and CH-53K King Stallion heavy-lift helicopters.
Opportunities for Peers
Other defense companies that should enjoy the perks of the expanding military rotorcraft market have been discussed below.
Boeing (BA - Free Report) : The company’s military rotorcraft is renowned worldwide for its leading-edge, ready and relevant solutions that deliver proven capabilities. Boeing’s product portfolio includes combat helicopters and rotorcraft like CH-47 Chinook, AH-64 Apache, AH-6 Little Bird and V-22 Osprey.
Boeing has a long-term (three to five years) earnings growth rate of 4%. The Zacks Consensus Estimate for BA’s 2024 sales indicates an improvement of 12% from the 2023 reported figure.
Airbus Group (EADSY - Free Report) : It is one of the world's largest suppliers of advanced military helicopters. Its product portfolio includes the H135 combat helicopter, the H145M helicopter, AS565 MBe Panther, H160M, H175M, H215M, H225M and a few more.
Airbus’ long-term earnings growth rate is 12.4%. The consensus estimate for BA’s 2024 sales indicates an improvement of 9.5% from the 2023 reported figure.
Textron (TXT - Free Report) : Its Bell unit is one of the leading suppliers of helicopters to the U.S. government. In association with Boeing, this unit is the only supplier of military tiltrotor aircraft. Some of TXT’s key programs are AH-1Z helicopter, V-22 tiltrotor, V-247 and V280 aircraft.
Textron boasts a long-term earnings growth rate of 10.1%. The Zacks Consensus Estimate for TXT’s 2024 sales indicates an improvement of 7% from the 2023 reported figure.
Price Movement
In the past month, shares of Lockheed have surged 4.9% compared with the industry’s growth of 2.7%.
Image: Bigstock
Lockheed (LMT) Secures a Contract to Support H-60 Helicopters
Lockheed Martin Corp.’s (LMT - Free Report) Rotary and Mission Systems (“RMS”) business segment recently clinched a contract involving its H-60 helicopters. The award has been offered by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $86.9 million, the contract is expected to be completed by March 2029. Per the terms of the deal, Lockheed will provide sustainment engineering and logistics services support for all types/models/series of H-60 helicopters.
The contract will serve the U.S. Navy, along with the governments of Australia, Denmark, Saudi Arabia, South Korea, Greece, India and Spain. Work related to this deal will be executed in Owego, NY.
What’s Favoring Lockheed?
Lockheed’s H-60 fleet of Black Hawk multirole helicopters serves the U.S. military and the armed forces of 34 other countries worldwide. With digital avionics, powerful GE engines, high-strength airframe structures and composite wide chord rotor blades, today’s BLACK HAWK platform has better survivability and situational awareness. It can also fly higher and carry more than its predecessors.
The advanced weapon system for BLACK HAWK helicopters allows pilots to identify and engage static or moving targets with forward-firing guns, rockets and laser-designated air-to-ground missiles.
Such remarkable features of this helicopter must have resulted in solid order flows for Lockheed, like the latest one.
The fact that more than 4,000 BLACK HAWK aircraft of all types are in service worldwide reflects the solid demand that LMT’s H-60 helicopters enjoy in the combat helicopter market. Backed by such solid demand, we may expect LMT to win more similar contracts in the coming days, which in turn should boost its revenue growth from the RMS unit.
Growth Prospects
U.S. military helicopters have been gaining prominence and significant traction of late, due to advancements and integration of new tactical, logistical and other important features. With Lockheed being a renowned combat helicopter manufacturer, such a trend has set the stage for this defense contractor to win helicopter delivery and associated service contracts frequently from the Pentagon and other U.S. allies. The recent contract win is a bright example of that.
Looking ahead, rising geopolitical and cross-border conflicts across the globe have forced nations to increase their defense spending toward procuring new aircraft and helicopters to enhance their aerial capabilities. Per a report from Mordor Intelligence, the military rotorcraft market is likely to witness a CAGR of more than 4% during the 2024-2029 period.
This should significantly boost Lockheed, as the company enjoys a dominant position in the military helicopter market with its portfolio containing combat-proven programs like Black Hawk, MH-60R Seahawk, HH-60W Combat Rescue, CH-148 Cyclone, S-97 Raider and CH-53K King Stallion heavy-lift helicopters.
Opportunities for Peers
Other defense companies that should enjoy the perks of the expanding military rotorcraft market have been discussed below.
Boeing (BA - Free Report) : The company’s military rotorcraft is renowned worldwide for its leading-edge, ready and relevant solutions that deliver proven capabilities. Boeing’s product portfolio includes combat helicopters and rotorcraft like CH-47 Chinook, AH-64 Apache, AH-6 Little Bird and V-22 Osprey.
Boeing has a long-term (three to five years) earnings growth rate of 4%. The Zacks Consensus Estimate for BA’s 2024 sales indicates an improvement of 12% from the 2023 reported figure.
Airbus Group (EADSY - Free Report) : It is one of the world's largest suppliers of advanced military helicopters. Its product portfolio includes the H135 combat helicopter, the H145M helicopter, AS565 MBe Panther, H160M, H175M, H215M, H225M and a few more.
Airbus’ long-term earnings growth rate is 12.4%. The consensus estimate for BA’s 2024 sales indicates an improvement of 9.5% from the 2023 reported figure.
Textron (TXT - Free Report) : Its Bell unit is one of the leading suppliers of helicopters to the U.S. government. In association with Boeing, this unit is the only supplier of military tiltrotor aircraft. Some of TXT’s key programs are AH-1Z helicopter, V-22 tiltrotor, V-247 and V280 aircraft.
Textron boasts a long-term earnings growth rate of 10.1%. The Zacks Consensus Estimate for TXT’s 2024 sales indicates an improvement of 7% from the 2023 reported figure.
Price Movement
In the past month, shares of Lockheed have surged 4.9% compared with the industry’s growth of 2.7%.
Image Source: Zacks Investment Research
Zacks Rank
Lockheed currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.