Threats of sequestration, budget cuts and the government's
partial shutdown notwithstanding,
Lockheed Martin Corp.
) has received a sizeable contract from the U.S. Army valued at
potentially as much as $4.1 billion to provide communications
equipment and services.
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Per this indefinite-delivery/indefinite-quantity contract (IDIQ),
Lockheed will compete for task orders to provide communications
and transmissions systems to the U.S. Army's Project Manager of
Defense Communications and Army Transmissions Systems (PM DCATS)
over the next five years. The awards must be initiated within the
contract's five-year period and will have a ceiling value of $4.1
The world's largest U.S. defense contractor will partner
Globecomm Systems Inc. (GCOM), Inmarsat, and Hughes Network
Systems for specific communications infrastructure capabilities
that are vital to the PM DCATS mission.
This latest deal comes a few days after
) inked a defense contract with the U.S. Navy. The contract with
a value of $1.6 billion calls for Raytheon to make missile and
defense-radar systems for a new generation of destroyers.
Sequestration and spending cuts were expected to adversely impact
the performance of the defense behemoths that explicitly provide
products and services to these defense establishments. However,
defense players like Lockheed, Raytheon,
General Dynamics Corp.
Northrop Grumman Corp.
) and The Boeing Co. (BA), seem to be doing well despite the cuts
in defense budgets and big-ticket programs.
Lockheed Martin has a wide customer base comprising the U.S.
government, foreign governments and other commercial buyers.
Recently, Lockheed won two major contracts, worth $7.8 billion,
from the U.S. Department of defense (DoD) for 71 more F-35
fighter jets. Both these agreements mark a significant milestone
reflecting cost reduction efforts for this very expensive fighter
jet. The defense department inked agreements for the sixth and
seventh lots of the U.S. military's most exclusive weapons
acquisition program - the F-35 Joint Strike Fighter.
Lockheed presently retains a short-term Zacks Rank #1 (Strong
Buy). We also have Raytheon and Northrop Grumman in the space
with a Zacks Rank #2 (Buy).