Lockheed Martin Corporation
) has received a Global Systems Management Operations (GSM-O)
contract worth $4.6 billion to manage the transformation of the
global data network, which is known as the Global Information Grid
for Department of Defense. The seven-year contract includes a
three-year base contract period and two 2-year options to extend it
to a total of seven years. GSM-O is the largest of three Defense
Information Systems Agency (DISA) Global Systems Management
Previously, Lockheed had received a three-year contract in June
this year, worth $4.6 billion to help in managing the changes to
the Defense Department's global data network. The three-year
contract included 2 two-year options. However, the whole pact falls
under a seven-year global systems management operations contract.
Per the current contract, the company will supervise that GSM-O
responsibilities are being transitioned easily and smoothly with
its teammates that include AT&T, ACS, Serco, BAE Systems,
ManTech, and other specialized and small businesses. Moreover,
Lockheed Martin will be responsible for evolving the Global Systems
Management Operations network in such a manner that it will help in
supporting new communications capabilities and technologies, which
in turn, will directly enhance the capability of war fighters'
ability to achieve their goals.
GSM-O is headquartered at Fort Meade, Maryland, with several
support locations globally. These operations provide programmatic,
operations, and engineering services; material; equipment; and
facilities to support the lifecycle management of the network.
Also, in August this year, Lockheed Martin was selected as one of
the seven awardees for a one-year indefinite delivery/indefinite
quantity ("IDIQ") contract for Test and Evaluation Mission Support
Services ("TEMSS") program by the U.S. Defense Information Systems
Agency ("DISA"). The contract includes four one-year options with a
potential ceiling value of $800 million for all awardees.
Based in Bethesda, Maryland, Lockheed Martin is a global security
and aerospace company that is principally engaged in the research,
design, development, manufacture, integration and sustainment of
advanced technology systems, products and services.
The company is expected to release its third-quarter 2012 results
on October 24, 2012. The Zacks Consensus Estimates for
third-quarter 2012 and fiscal 2012 are currently pegged at $1.85
per share and $8.10 per share, respectively.
We are bullish on Lockheed's incremental dividend payout, a stable
order backlog, and leveraged presence in the Army, Air Force, Navy
and IT programs. Also, going forward, we expect shareholder return
to continue to be shored up by the company's focus on debt
repayment. The company presently retains a short-term Zacks #2 Rank
(Buy) that corresponds with our long-term Outperform recommendation
on the stock.
The company mainly competes with
General Dynamics Corporation
Northrop Grumman Corporation
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