Lockheed Gets $65M Contract - Analyst Blog


Lockheed Martin Corporation ( LMT ) has been awarded a firm, fixed-price contract worth $65 million by the U.S. Army and U.S. Marine Corps. It is an ongoing contract with a 27-month performance period for developing the Joint Light Tactical Vehicle ("JLTV") via the Engineering and Manufacturing Development ("EMD") stage.

Per the agreement, Lockheed Martin will provide 22 vehicles within a period of 12 to 14 months. This transaction deals with supply of companion trailers, which includes a two-seat prime mover with an open bed, the utility carrier and shelter ("JLTV-UTL"), and a four-seater general-purpose vehicle, which can take ammunition, troops and other important supplies.

Lockheed Martin set up the JLTV team in 2005 with other industry leaders, namely BAE Systems plc ("BA.L"), Allison Transmission Holdings Inc. ( ALSN ), L-3 Communications Holdings Inc. 's ( LLL ) L3 Combat Propulsion Systems unit and many others. The principal objective of JLTV is to offer a family of vehicles ("FOV") with companion trailers, which are competent to execute several mission tasks related to defended, continued and networked mobility for personnel and ammunitions in a full range of military action.

Lockheed Martin's JLTV EMD vehicles are improvised as well as affordable versions compared to earlier models. This new EMD vehicles cost and weigh less than the existing vehicles. This vehicle provides higher fuel efficiency and blast-protection standards, and less logistical support costs.  
Lockheed Martin ended second-quarter 2012 with a backlog of $75.5 billion. After the announcement, the company received several significant contracts from U.S. defense establishments, particularly a follow-on contract worth $353.2 million from the U.S. Army to produce Guided Multiple Launch Rocket System ("GMLRS") Unitary rockets and another contract from the Army with a transaction value of $150 million to supply  a Terminal High Altitude Area Defense ("THAAD") Weapon System.

During the second-quarter 2012 earnings call, Lockheed Martin reaffirmed its full-year 2012 revenues between $45 billion and $46 billion. However, the company raised its earnings per share from continuing operations to between $7.90 and $8.10, compared with its earlier projected range of $7.70 to $7.90.

As per the Zacks Consensus Estimates, Lockheed Martin's earnings for the third-quarter and full-year 2012 are currently pegged at $1.85 per share and $8.10 per share, respectively.

We view Lockheed Martin as a well-positioned organization with its successful delivery of ground vehicles, aircrafts, radars, missiles & guided weapons, information technology management services, infrastructure and applications to the U.S. & several other international defense forces. As one of the largest standalone defense contractors in the world, Lockheed Martin has a strong contract pipeline.

However, the ongoing trend of delays in government programs along with program cancelations will dent Lockheed Martin's forthcoming performance.

Lockheed Martin Corporation currently retains a Zacks #2 Rank, which translates into a short-term Buy rating.

Bethesda, Maryland-based Lockheed Martin Corporation is a global security and aerospace company that is principally engaged in the research, design, development, manufacture, integration and maintenance of advanced technology systems, products and services.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ALSN , LLL , LMT



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