Lockheed Martin Corporation
) has entered into an agreement with
Ocean Power Technologies, Inc.
) for the development of a 19-megawatt wave-energy project off the
coast of Portland in Victoria, Australia.
LOCKHEED MARTIN (LMT): Free Stock Analysis
OCEAN POWER TEC (OPTT): Free Stock Analysis
To read this article on Zacks.com click here.
Ocean Power Technologies is a leading wave-energy technology
company. It harnesses ocean waves to generate reliable and clean
electricity in an environmentally-friendly way. Per the
agreement, Lockheed will help OPTT in its PowerBuoy technology and
lead the production and system integration of the wave-energy
converters. It will lend its support to overall program management.
Wave energy has the potential to produce around 2,000 terawatt
hours of electricity in a year, or sufficient power to meet 10% of
the world's current energy needs.
The project will be developed by Ocean Power Technologies
(Australasia) Pty Ltd.'s subsidiary Victorian Wave Partners Pty
Ltd, a special purpose company in Australia. To date, it is one of
the largest wave-energy projects. The project leverages a grant
from the Commonwealth of Australia and includes a previously
announced grant of $65.3 million for it. The cohorts are in the
process of evaluating financing opportunities for the project and
are pursuing purchase power agreements with the local industry and
utilities. As per the funding deed, the project is permitted to
secure additional financing as and when a need arises.
This is not the first time that both the companies have come
together for a project. They have been collaborating since 2004.
Initially they worked on the development of an Advanced Deployable
System for the U.S. Navy and recently joined forces to design and
launch utility-scale wave energy converters off the coast of
Lockheed's partnership with Ocean Power Technologies proves its
diversified revenue exposure. The company is focusing on applying
its proficiency to commercialize emerging alternative energy
On the defense side, Lockheed Martin is the largest U.S. defense
contractor with a steady inflow of follow-on orders from a
leveraged presence in the Army, Air Force, Navy and IT programs.
Also, we expect shareholders return to be shored up with the
company's focus on debt repayment, its ongoing share repurchase
program and incremental dividend.
We currently have a cautious stance on Lockheed Martin Corporation
due to the impact of the Euro-crisis on U.S. economic fundamentals.
This increases the risk of further cutbacks in defense budgets. The
company presently retains a short-term Zacks #3 Rank (Hold) that
corresponds to our long-term Neutral recommendation on the stock.