Lockheed Martin Corp.
) business wing, Mission Systems and Training, won a $295 million
contract from the Department of Defense (DoD) on Jul 1, 2013, for
work on the Aegis missile defense. This was the second largest
order on a day the DoD doled out contracts worth $1.5 billion.
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This is a sole-source,
incentive fee contract modification, under which Lockheed Martin
will provide system engineering and program management services.
This is mainly intended for the development of Aegis Ballistic
Missile Defense Baseline which would support the 5.1 variant
through the Critical Design Review and Increment-2 through the
Preliminary Design Review. The company's work on the contract
will continue through Mar 30, 2015.
Bethesda, MD-based Lockheed Martin Corporation 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. It is the largest U.S. defense contractor with a
platform-centric focus and a steady inflow of follow-on orders
due to its leveraged presence in the Army, Air Force, Navy and IT
Despite a flurry of DoD contracts, the threat of sequestration,
fear from budget uncertainty, the fate of high-cost programs,
risks associated with key project executions and order
cancellations cannot be denied. In this scenario, we believe more
international order wins will partly counter the budget
strictness of the U.S. DoD, providing a regular stream of
revenues for the defense prime.
Recently, Lockheed Martin's Mission Systems and Training division
also won a $6.9 million cost-plus-incentive-fee,
cost-plus-fixed-fee contract to perform additional Aegis
development work for the U.S. Navy. The deal though minor has an
option, which would boost the total value to $304.4 million, if
Lockheed Martin is a Zacks Rank #2 (Buy) stock. Other stocks from
the sector that are presently performing well include
Erickson Air-Crane Inc.
) with a Zacks Rank #1 (Strong Buy), and
The Boeing Company
Northrop Grumman Corp.
), both with a Zacks Rank #2 (Buy).