Lockheed Martin Corp.
) received two contract modifications for approximately $90
million from the Department of Defense (DoD).
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The first contract worth $75.2 million is under the Contractor
Logistics Support, Legacy Sustainment, and Combined Task Force
Support program. Per the contract, the company will execute
permanent sustainment modifications on the Space Based Infrared
System Survivable Endurable Evolution's Mobile Ground System.
This will allow the ground systems to process Defense Support
Program and SBIRS geosynchronous orbit satellites mission data
while issuing limited contingency commands to the satellites,
whenever required. This modification contract will bring the
value of the original contract to $181.1 million. The work on the
contract will continue through Jan 31, 2017.
Per the other modification contract, worth $14.4 million, the
company will continue to provide logistics support to Iraq's
C-130E Hercules transport aircraft for a fourth option year,
through Jun 30, 2014. The contract will augment the value of the
original contract to $61.6 million.
Meanwhile, in a firm-fixed-price contract extension worth $206.9
million from the DoD, the company will supply additional
AN/TPQ-53 radar systems and corresponding spare parts. This will
enhance the value of the contract to $605 million.
Recently, Lockheed Martin received a string of DoD contracts
totaling $64.4 million. The biggest contract received by the
company was valued at $30.3 million for the modification of
Mission Avionics Systems and Common Cockpits for MH-60R Sikorsky
Seahawk helicopters. The company secured international contract
from the Royal Saudi Air Force for the supply of 95 Sniper
Advanced Targeting Pods, 70 Infrared Search and Track systems, 35
Compact Multiband Data Link systems, 75 IRST pylons and spare
parts. The contract is valued at $21.4 million and is anticipated
to be concluded on Dec 31, 2019. The final contract worth $12.7
million calls for supplying 72 retrofit kits, other support
equipment as well as spares to modify the F-22's automatic back
up life support system.
Lockheed Martin is the largest U.S. defense contractor with a
platform-centric focus that guarantees a steady inflow of
follow-on orders. We expect Lockheed Martin to register a stable
performance in the long run due to a leveraged presence in the
Army, Air Force, Navy and IT programs. Also, shareholder return
will continue to be shored up by the company's focus on debt
repayment, its ongoing share repurchase program and the
However, like its peers,
The Boeing Company
Northrop Grumman Corp.
Erickson Air-Crane Inc.
), Lockheed Martin continues to face the brunt of defense budget
cuts which will limit its operating results. Lockheed presently
retains a short-term Zacks Rank #3 (Hold).