Lockheed Martin Corp.’s (LMT - Free Report) Aeronautics business division recently won a contract for offering sustainment engineering services to the C-5 airlifter program. Work related to the deal is scheduled to be completed by Jan 25, 2019.
Valued at $131.6 million, the contract was awarded by the Air Force Life Cycle Management Center, Robins Air Force Base, GA. Lockheed Martin will execute the task at Fort Worth, TX; Marietta, GA; and Palmdale, CA.
A Brief Note on C-5
Air Force’s largest and only strategic airlifter, Lockheed’s C-5 Galaxy can haul twice as much cargo than any other airlifter. Its latest version, C-5 modernization provides greatly improved reliability, efficiency, maintainability and availability while ensuring this critical national strategic airlift resource continues serving the warfighter well into the 21st century.
What Favors Lockheed Martin?
In the backdrop of widespread geopolitical tensions, insurgency has become a subject of increasing interest across the U.S. armed services. Naturally, to perform critical counterinsurgency missions, the United States has to rely largely on its airlift forces. To this end, Lockheed’s C-5 plays a vital role in airlift missions.
Since its inception, the C-5 has been a critical instrument of national policy. From the defense of Israel in the Yom Kippur war to the air bridge supporting coalition forces in Desert Storm, the C-5 has unmatched capability to carry enormous loads over long distances. Therefore, in a period when the U.S. administration vehemently supports defense spending, one can expect the nation to strengthen its airlift force. The latest contract win is an example of that.
Furthermore, fiscal 2019 U.S. defense budget allocated $21.7 billion for spending on aircraft. Such budgetary provisions reflect solid growth prospects for Lockheed Martin’s Aeronautics business unit..
Lockheed Martin’s stock has declined 17.4% in the past year, wider than the industry’s decline of 8.4%. The underperformance may have been due to intense competition in the aerospace-defense space, both domestic and international.
Zacks Rank & Stocks to Consider
Lockheed Martin currently carries a Zacks Rank #3 (Hold).
A few better-ranked companies in the same sector are AeroVironment, Inc. (AVAV - Free Report) , Northrop Grumman Corp (NOC - Free Report) and The Boeing Company (BA - Free Report) .
While AeroVironment and Northrop Grumman sport a Zacks Rank #1 (Strong Buy), Boeing carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AeroVironment came up with average positive earnings surprise of 257.01% in the last four quarters. The Zacks Consensus Estimate for fiscal 2019 earnings has increased 33.3% to $1.48 in the past 90 days.
Northrop Grumman came up with average positive earnings surprise of 17.87% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has risen7% to $19.01 in the past 60 days.
Boeing came up with average positive earnings surprise of 28.01% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has increased 4.53% to $19.42 in the past 90 days.
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