Lockheed Martin Corp.’s (LMT - Free Report) business unit, Missiles and Fire Control (MFC), has won a modification contract to support production requirement of a Hellfire II missile.
Valued at $547.9 million, the contract has been awarded by the U.S. Army Contracting Command Redstone Arsenal, AL.
Per the deal, Lockheed Martin will provide support to 7,358 Hellfire II tactical missiles in containers, in various air-to ground missiles models.
Work is scheduled to be completed by Sep 30, 2020 and will be performed in Orlando, FL. The contract will use fiscal 2010, 2015, 2016, and 2017 other procurement (Army) funds.
Hellfire II Attributes
Hellfire II is an upgraded version of the Longbow Hellfire missiles. It is designed to respond to ground and naval threats. Also, it incorporates a semi-active laser guidance system, which gives them a precision, man-in-the-loop capability.
These missiles are available in two versions – High Explosive Anti-Tank for anti-armor requirements, and the Blast Fragmentation for naval targets, buildings and bunkers.
Lockheed Martin’s MFC business unit derives a major portion of its revenue from its air and missile defense product line. In the second quarter of 2017, this segment generated sales of $1.6 billion, which represented almost 13% of the company’s total sales.
In fact, the company claims to be the world leader in missile defense with its systems having achieved more than 100 successful intercepts in combat and flight testing since 1984 and 50 successful target missions since 1996.
Markedly, being the Pentagon’s prime defense contractor, Lockheed Martin enjoys a lion’s share of the aerospace-defense industry in the United States. Moreover, the budget proposal of $13.5 billion in addition to $25 billion that came from President Trump for core Defense Department programs for the current fiscal year has been allocated for a number of defense equipments. We believe that if this proposal is accepted it will surely boost Lockheed Martin’s revenue growth.
Considering the aforementioned developments, the company is expected to win more of such contracts in days ahead, given that most of its programs are the top priorities in the Pentagon’s missile system.
Lockheed Martin’s stock was up about 21.8% in the last one year, underperforming the broader industry’s gain of 36.3%. This could have been caused by the intense competition that the company faces for its broad portfolio of products and services domestically as well as internationally. Furthermore, the stock’s performance lags compared with that of The Boeing Co. (BA - Free Report) , Airbus Group SE (EADSY - Free Report) and Leidos Holdings, Inc. (LDOS - Free Report) , which surpassed the industry mark.
Lockheed Martin currently carries 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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