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Lockheed Wins $42M Air Force Contract for Gap Filler Radar

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Pentagon’s prime contractor Lockheed Martin Corp. (LMT - Free Report) has recently secured a foreign military sales (FMS) contract from the U.S. Air Force for procuring, delivering and installing the Gap Filler Radar for the Kingdom of Jordan.

Details of the Deal

Valued at $41.7 million, the contract was awarded by the Air Force Life Cycle Management Center, Hanscom Air Force Base, MA. Per the terms, Lockheed will provide two long-range radars and three upgrades to Jordan’s existing long-range radars.

Contract terms also cover the integration of new and upgraded radar into the overall command, control and communications system. Work, scheduled to be over by Apr 30, 2018, will be carried out at the Hanscom Air Force Base.

Gap Filler Radar & Lockheed Martin

Gap Fillers are small distributed radars that detect low-flying aircraft, which attempt to utlize the gaps in large radar coverage. Lockheed Martin has been partnering with Romania for a long time on a variety of programs, including these Gap Filler radars, which are complementary to the long-range FPS-117 radar.

Geopolitical tensions and the rise of ISIS have led to various nations stepping up their defense capabilities. The direct beneficiary of a volatile geo-economy and consequently rising demand for weapons is undoubtedly aerospace and defense majors like Lockheed Martin. In fact, it is the largest defense contractor in the U.S., which will allow it to take maximum advantage of the worldwide political unrest.

The company has raised its 2016 sales outlook (per its second-quarter 2016 results), indicating management’s expectations for more of such contracts in the future.

Zacks Rank & Stocks to Consider

Lockheed Marin currently carries a Zacks Rank # 4 (Sell). A few better-ranked stocks in the aerospace and defense sector include AAR Corp. (AIR - Free Report) , Engility Holdings, Inc. (EGL - Free Report) and General Dynamics Corp. (GD - Free Report) .

AAR Corp. sports a Zacks Rank #1 (Strong Buy) and has witnessed a 12.5% surge in its stock price in the last one month. The company’s current year consensus estimate improved 5% over the same time frame.

Engility has witnessed a 4% rise in its stock price in the last one month. The company’s current year consensus estimate improved 13.6% in the last 60 days. It carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

General Dynamics holds a Zacks Rank #2 (Buy) and has witnessed a 0.8% rise in its stock price in the past one month. The company’s current year consensus estimate has improved 1% in the last 60 days.

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