Defense major Lockheed Martin Corp.’s (LMT - Free Report) business unit, Sikorsky Aircraft recently secured a contract from the U.S. Army for the sale of six UH-60M Black Hawk helicopters to the Taiwan government. Notably, these six choppers have been uniquely configured to serve the Taiwan National Airborne Service Corp.
Details of this Deal
Valued at $148.7 million, this foreign military sales (FMS) contract was awarded by the Army Contracting Command, Redstone Arsenal, AL.
The contract will utilize fiscal 2016 other funds to finance the work. Work, to be executed in Stratford, CT, is scheduled to be complete by Dec 31, 2021.
Other Similar Contracts
In recent times, Lockheed has won several other contracts from the U.S. Army for the same product line. Sikorky clinched another FMS contract for four UH-60M Blackhawk aircraft for the Tunisian government. These uniquely modified choppers will offer support to the Tunisian Ministry of National Defense. Valued at $38.4 million, the contract too was awarded by the Army Contracting Command.
The contract will also utilize fiscal 2016 other funds. Work is scheduled to be complete by Apr 30, 2020 and will be carried out in Stratford.
Sikorky has grabbed another deal, worth $90.2 million for offering non-personal technical field service for the UH-60 Blackhawk choppers. This takes the total value of the three contracts to $277.3 million.
The contracting activity is the same as that of the previous contracts. Work will be over by Sep 26, 2021. However, details of funding and work location for this contract have not been disclosed yet, and will be determined with individual order.
A Brief Note on Blackhawk
Originally developed and manufactured by Sikorsky, the Blackhawk helicopter has been the work-horse for the U.S. Army, performing multi-mission tactical operations since 1978. There are numerous variants of this product line, which has been successfully serving the nation as well as foreign governments.
While UH-60 is one of the legacy Blackhawk models, UH-60M is a modified version of this family of copters. It is a twin-engine, medium-lift utility copter that offers fail-safe service, during both day and night, in the harshest weather conditions, anywhere in the world.
Among other models of the Black Hawk, UH-60M is the most efficient, thanks to its integrated digital cockpit, moving map display, enhanced GPS/INS system, fully integrated flight controls and superior vertical lift.
We remind investors that the purchase of the Sikorky Aircraft for $9 billion in cash, last November strengthened Lockheed’s position as the largest defense contractor in the U.S. Notably, this acquisition added Sikorsky’s world-known aircraft, Black Hawk, along with a handful of combat and commercial choppers, to Lockheed’s helicopter product line.
Going ahead, management expects to witness improved cash flows from the Sikorsky business unit in 2018, indicating possibilties of expansion of the business in the days to come. We believe such generous fund flows from Pentagon, in the form of contracts, can certainly help the company achieve its desired business expansion.
Zacks Rank & Stocks to Consider
Lockheed currently carries a Zacks Rank #4 (Sell). A few better-ranked stocks in the aerospace and defense sector include Engility Holdings, Inc. (EGL - Free Report) , General Dynamics Corp. (GD - Free Report) and Ducommun Inc. (DCO - Free Report) .
Engility's shares witnessed a 0.6% rise during the last trading session. On an average, the company has delivered a positive earnings surprise of 12.09% in the trailing four quarters. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ducommun, also sporting a Zacks Rank #1, has witnessed an almost 1% rise in its stock price during the last trading session. The company’s current year consensus estimate improved 9.4% in the last 60 days.
General Dynamics, a Zacks Rank #2 (Buy) stock, has witnessed a 0.5% gain in its last day’s stock price. The company’s current year consensus estimate improved 1% in the last 60 days.
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