The largest U.S. defense operator
Lockheed Martin Corporation
) recently received four contracts from the Department of Defense
(DoD). Together these contracts fetched $822.5 million, nearly
76.9% of the total orders awarded by the DoD on Dec 27.
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The largest among the four contracts was a $574.5 million order
to build the Aegis weapon system for the U.S. Navy. The changing
defense landscape makes it essential for the defense
establishments to upgrade existing arsenal to meet future
challenges. In Aug 2013, the company along with the U.S. Navy
successfully tested the Aegis Combat System at sea.
The test showed the increasing interoperability with remote
systems proving that the Aegis system can defend beyond its line
of sight by integrating data from a remote sensor to intercept a
target. This new contract will improve the defensive strength of
The combined value of the other three contracts received by
Lockheed came to $248 million. In a $116.1 million order,
Lockheed is called upon to develop the U.S. Air Force Space and
Missile Systems Center's Space Vehicle 4 (SV-4), and put the same
into the launch vehicle.
An $84.6 million contract went to produce the Acoustic Rapid
Commercial-Off-The-Shelf Insertion (A-RCI) sonar systems for the
Navy while $47.3 million was allocated to support critical air,
missile and space defense operations at the NORAD Cheyenne
Mountain Complex and other NORAD locations.
The above mentioned contracts reflect the wide range of products
and technical expertise at the disposal of Lockheed. The solid
performance of the company over the last twelve months is also
reflected in its traded price. Lockheed's share price closed at
$148.13 on Dec 27, reflecting a gain of 66.5% over the last
Apart from Lockheed, defense operator
The Boeing Company
) recently received defense contracts worth $661 million from the
DoD. Boeing's share price has also risen 84.1% over the past
Lockheed currently has a Zacks Rank #2 (Buy). Other players in
the aerospace/defense sector, which look attractive at current
Northrop Grumman Corporation
). Both these stocks carry the same Zacks rank as Lockheed.