Lockheed Martin Corporation (LMT - Free Report) announced that its business segment, Rotary and Missions Systems, has been awarded a modification contract for providing ship integration and test of the Aegis Weapon System (AWS). The contract valued at $17.5 million was awarded by Naval Sea Systems Command, Washington, DC.
As per the company, 40% of the work related to this deal will be carried out at Pascagoula, MS and the rest will be carried out at Moorestown, NJ (20%); Washington, DC (10%); Bath, ME (10%); Norfolk, VA (10%) and San Diego, CA (10%). The work is expected to be completed by February 2020.
About AEGIS Combat System
Advanced Electronic Guidance and Instrumentation System ("AEGIS") is an integrated missile guidance system and capable of simultaneously attack land targets, submarines and surface ships as well as automatically shield the fleet against aircraft, cruise missiles and ballistic missiles.
Over time, AEGIS has become an integral part of the U.S. Navy by evolving with new capabilities to counter emerging threats and leverage new technologies. Its latest configuration, Baseline 9, offers an open architecture framework to allow extreme flexibility.
Earlier in the month of August, Lockheed Martin was awarded a $490.6-million contract by the U.S. Navy for the modification of the Aegis Weapon System MK-7. (Read More: Lockheed Wins $491M Deal for Aegis Weapon System)
Apart from Lockheed Martin, another company working on AEGIS is Raytheon Company (RTN - Free Report) . Earlier in June, the defense company secured a contract in relation to a previously awarded delivery order for supplying production requirements associated with AEGIS modernization. (Read more: Raytheon Wins $25M Navy Deal to Support AEGIS Modernization).
What is in Store for Lockheed Martin?
Lockheed Martin's Rotary and Mission Systems business carries out some of the company's high-profile programs, including the Aegis Combat System, Littoral Combat Ship, MH-60 helicopter avionics along with military and commercial orders.
Presently, Lockheed Martin's Aegis system is the maritime weapon system choice for six powerful nations. Therefore these new contracts for the AWS will surely boost the performance of the company in the coming days. The signs of growth were well reflected in the company’s second-quarter results where its quarterly earnings of $3.23 surpassed Zacks Consensus Estimate by 4.2%.
Additionally, the proposed hike in the defense budget will increase the order inflow from various verticals of the U.S. Defense for defense giants like Lockheed Martin, Raytheon Company, Northrop Grumman Corporation (NOC - Free Report) , The Boeing Company (BA - Free Report) and others.
Shares of Lockheed Martin have returned 1.7% outperforming the industry's gain of 0.4% in the last month.
The company has been witnessing strong demand for its products from domestic and overseas clients. Lockheed Martin witnesses a consistent flow of orders which boosts its performance.
Lockheed Martin currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
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