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Lockheed Martin Wins $58M Spare Parts Deal for CH-53K Copter
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Lockheed Martin Corp.’s (LMT - Free Report) business unit, Sikorsky Aircraft Corp., recently secured a $58.4-million contract for the delivery of 866 interim spare parts. The spare parts will be used for the repair and maintenance of CH-53K aircraft’s 2nd lot. The contract was awarded by the Naval Air Systems Command, Patuxent River, Maryland.
Work related to the deal will be carried out in Stratford, CT; Redmond, WA; Quebec, Canada; and various other locations within and outside the United States. The entire task is expected to be completed by January 2021. Lockheed Martin will utilize fiscal 2018 aircraft procurement (Navy) funds for completing the task.
A Brief Note on CH-53K King Stallion
The CH-53 King Stallion advances Sikorsky’s 50 years of manufacturing and operational success with its CH-53A, CH-53D/G and CH-53E predecessors. The new heavy lifter will allow the U.S. Marine Corps and international militaries to move troops and equipment from ship to shore, and to high-altitude terrains, more quickly and effectively.
The CH-53K helicopter is also effective for handling missions like humanitarian aid, troop transport, casualty evacuation (CASEVAC), support of special operations forces, and combat search and rescue (CSAR).
What Favors Lockheed Martin?
In recent times, military helicopters in the U.S. aerospace-defense market gained significant traction due to advancements and integration of new tactical and logistical features along with the inclusion of improved radar systems within them. Such developments will help the company acquire valuable contracts, going forward.
During second-quarter 2018, revenues at Lockheed Martin’s Rotary and Mission Systems (RMS) business segment increased 4.5% year over year, partially driven by higher volume of sales for its CH-53K helicopter. We can expect Lockheed Martin’s RMS unit to generate similar top-line growth in days ahead, based on consistent order flows from Pentagon, like the latest one.
As of Jun 30, 2018, the company has 18 of these CH-53K helicopters that are in various stages of production as the program continues to mature and grow. This clearly shows the growing demand for these choppers in the defense space, which, in turn, are expected to boost Lockheed Martin’s top line, once delivered.
Meanwhile, toward the end of June 2018, the U.S. Senate approved the fiscal 2019 defense budget that provisions for major war fighting investments worth $21.7 billion in aircraft. In particular, the budget includes an investment plan of $1.6 billion for Lockheed Martin’s CH-53K helicopter, witnessing a 45% rise in investments compared to the fiscal 2018 defense budget. No doubt, such a flamboyant budgetary revision would expand the company’s profit margin significantly, in the days ahead.
Price Movement
Lockheed Martin’s stock has improved about only 8.2% in the last year compared with the industry’s growth of 21.3%. The underperformance may have been caused by the intense competition the company faces in the aerospace-defense space for its broad portfolio of products and services, both domestically as well as internationally.
Zacks Rank & Key Picks
Lockheed Martin currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the same sector are Aerojet Rocketdyne Holdings , Engility Holdings and Huntington Ingalls Industries (HII - Free Report) .
Aerojet Rocketdyne came up with an average positive earnings surprise of 9.27% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen 30.9% to $1.27 in the last 90 days.
Engility Holdings delivered an average positive earnings surprise of 19% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has moved up 16.1% to $2.02 in the last 90 days.
Huntington Ingalls pulled off an average positive earnings surprise of 9.48% for the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings has moved 6.4% north to $17.24 in the last 90 days.
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Lockheed Martin Wins $58M Spare Parts Deal for CH-53K Copter
Lockheed Martin Corp.’s (LMT - Free Report) business unit, Sikorsky Aircraft Corp., recently secured a $58.4-million contract for the delivery of 866 interim spare parts. The spare parts will be used for the repair and maintenance of CH-53K aircraft’s 2nd lot. The contract was awarded by the Naval Air Systems Command, Patuxent River, Maryland.
Work related to the deal will be carried out in Stratford, CT; Redmond, WA; Quebec, Canada; and various other locations within and outside the United States. The entire task is expected to be completed by January 2021. Lockheed Martin will utilize fiscal 2018 aircraft procurement (Navy) funds for completing the task.
A Brief Note on CH-53K King Stallion
The CH-53 King Stallion advances Sikorsky’s 50 years of manufacturing and operational success with its CH-53A, CH-53D/G and CH-53E predecessors. The new heavy lifter will allow the U.S. Marine Corps and international militaries to move troops and equipment from ship to shore, and to high-altitude terrains, more quickly and effectively.
The CH-53K helicopter is also effective for handling missions like humanitarian aid, troop transport, casualty evacuation (CASEVAC), support of special operations forces, and combat search and rescue (CSAR).
What Favors Lockheed Martin?
In recent times, military helicopters in the U.S. aerospace-defense market gained significant traction due to advancements and integration of new tactical and logistical features along with the inclusion of improved radar systems within them. Such developments will help the company acquire valuable contracts, going forward.
During second-quarter 2018, revenues at Lockheed Martin’s Rotary and Mission Systems (RMS) business segment increased 4.5% year over year, partially driven by higher volume of sales for its CH-53K helicopter. We can expect Lockheed Martin’s RMS unit to generate similar top-line growth in days ahead, based on consistent order flows from Pentagon, like the latest one.
As of Jun 30, 2018, the company has 18 of these CH-53K helicopters that are in various stages of production as the program continues to mature and grow. This clearly shows the growing demand for these choppers in the defense space, which, in turn, are expected to boost Lockheed Martin’s top line, once delivered.
Meanwhile, toward the end of June 2018, the U.S. Senate approved the fiscal 2019 defense budget that provisions for major war fighting investments worth $21.7 billion in aircraft. In particular, the budget includes an investment plan of $1.6 billion for Lockheed Martin’s CH-53K helicopter, witnessing a 45% rise in investments compared to the fiscal 2018 defense budget. No doubt, such a flamboyant budgetary revision would expand the
company’s profit margin significantly, in the days ahead.
Price Movement
Lockheed Martin’s stock has improved about only 8.2% in the last year compared with the industry’s growth of 21.3%. The underperformance may have been caused by the intense competition the company faces in the aerospace-defense space for its broad portfolio of products and services, both domestically as well as internationally.
Zacks Rank & Key Picks
Lockheed Martin currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the same sector are Aerojet Rocketdyne Holdings , Engility Holdings and Huntington Ingalls Industries (HII - Free Report) .
While Aerojet Rocketdyne sports a Zacks Rank #1 (Strong Buy), Huntington Ingalls and Engility carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Aerojet Rocketdyne came up with an average positive earnings surprise of 9.27% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen 30.9% to $1.27 in the last 90 days.
Engility Holdings delivered an average positive earnings surprise of 19% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has moved up 16.1% to $2.02 in the last 90 days.
Huntington Ingalls pulled off an average positive earnings surprise of 9.48% for the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings has moved 6.4% north to $17.24 in the last 90 days.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>