Back to top

Lockheed (LMT) Wins $60M-AEGIS Weapons System Support Deal

Read MoreHide Full Article

Defense behemoth Lockheed Martin Corp.’s (LMT - Free Report) Rotary Mission Systems business division secured a modification contract, to support the AEGIS weapon system (AWS). Work related to this deal is expected to be over by November 2018.

Details of the Deal

Valued at $60.2 million, the contract was awarded by the Naval Sea Systems Command, Washington, D.C. Per the terms of the agreement, Lockheed Martin will conduct  ship integration and test of the AWS for AWS baselines through Advanced Capability Build 12.

Majority of the work will be executed in Camden, NJ; Norfolk, VA; Pascagoula, MS; and Moorestown, NJ.  Fiscal 2012 and 2013 shipbuilding and conversion; fiscal 2017 and 2018 other procurement; and fiscal 2018 operations and maintenance funds will be used to partly finance the deal.

A Brief-Note on AWS

Lockheed Martin’s AWS is the world’s premier naval air defense system and the sea-based element of the United States’ Ballistic Missile Defense System. It is a seamlessly integrated radar and missile system, which has the capability to provide protection against advanced air, surface and subsurface threats.

A key component of the AWS is the SPY-1 multi-function phased array radar — the world’s most advanced and versatile maritime radar.

Our View

Lockheed Martin's Rotary and Mission Systems (RMS) 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.

At present, Lockheed Martin's Aegis system is a sought-after maritime weapon system for nations like Australia, Japan, Norway and Spain. In the third quarter the RMS unit’s revenues witnessed a year-over-year improvement. Going ahead, the latest contract for the AWS is expected to provide further impetus to this unit’s growth.

Additionally, the recently passed fiscal 2018 defense policy, authorizing the United States’ defense spending worth $700 billion, has enhanced the prospect of increased order flow from Pentagon for major defense contractors like Lockheed Martin, Raytheon Company (RTN - Free Report) , Northrop Grumman Corporation (NOC - Free Report) , The Boeing Company (BA - Free Report) and others.

Price Performance

Shares of Lockheed Martin have rallied 17.7% over a year underperforming the industry’s 31% gain. This could be because the earlier budget cuts might have put pressure on the top line.



Zacks Rank

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.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>

More from Zacks Analyst Blog

You May Like