Lockheed Martin Corporation
(
LMT
) has received a Foreign Military Sale ("FMS") contract worth
$5.1 million to support integration of the Joint Air-to-Surface
Standoff Missile ("JASSM") onto the Finnish Air Force ("FiAF")
F-18C/D aircraft of U.S. Air Force.
Joint Air-to-Surface Standoff Missile is an autonomous,
air-to-ground, precision-guided standoff missile. It provides
operational flexibility, reliability and effectiveness required
by allied warfighters in achieving their goals. It features a
penetrator and blast fragmentation warhead that allows it to work
autonomously not only on all day and night but in all weather
conditions. The missile has the capability to find specific
points of targets due to its infrared seeker and enhanced digital
anti-jam Global Positioning System ("GPS"). F-18C/D aircraft will
be upgraded when JASSM integration will coincide with the FiAF
Mid-Life.
The current contract is the first phase of the six-year effort of
software development and aircraft integration support. Finland is
the second international customer for JASSM. Going forward also,
the company expects to receive contracts of integration support,
missile procurement and post-production support for remaining
phases.
Currently, U.S. Air Force's B-1, B-2, B-52, F-16 and F-15E are
supported by JASSM. On an international basis, JASSM is certified
on the F/A-18A/B for the Royal Australian Air Force.
Recently, the company received a contract from the U.S. Naval Air
Systems command for the integration of new avionics and software
on multiple C-130T aircraft. Per the contract, the company will
incorporate the Department of Defense's Future Airborne
Capability Environment conformant cockpit and also develop and
deliver nine initial cockpit kits that will provide the Navy with
the latest avionics and software technology.
This indicates that the company has ample products that are
beneficial for the U.S Air Forces. Going forward, we expect the
company to benefit from a strong defense focus on a number of its
platform programs, such as the C-130 Hercules & C-5 Galaxy
transport aircrafts, F-16 Fighting Falcon multi-role jet, MH-60
Helicopters, the Advanced Extremely High Frequency & the GPS
III system satellites, the Littoral Combat Ship, the Aegis
Weapons System for mobile and sea-based missile defense and the
Terminal High Altitude Area Defense system.
Over the longer run, we expect the company to register a stable
performance as a result of its leveraged presence in the Army,
Air Force, Navy and IT programs. Also, shareholder return will
continue to be boosted by the company's focus on debt repayment,
its ongoing share repurchase program and the incremental
dividend.
However, U.S. economic fundamentals are basically being kept on a
leash as the Euro-crisis continues to cast its spell over
financial markets, risking further cutbacks in future defense
budgets.
Like its peers
General Dynamics Corporation
(
GD
) and
Northrop Grumman Corporation
(
NOC
), the company presently retains a short-term Zacks #3 Rank
(Hold) that corresponds with our long-term Neutral recommendation
on the stock.
Based in Bethesda, Maryland, Lockheed Martin is a global security
company that is principally engaged in the research, design,
development, manufacture, integration and sustainment of advanced
technology systems, products and services.
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