Lockheed Martin Corporation
) has been chosen as one of the seven recipients of a contract,
with a potential total value of $899.5 million, by the U.S. Navy
to provide battlespace awareness technology. Other members
selected for the deal were
Booz Allen Hamilton Holding Corporation
CACI International Inc.
L-3 Communications Holdings Inc.
), Science Applications International and Scientific Research.
BOOZ ALLEN HMLT (BAH): Free Stock Analysis
CACI INTL A (CACI): Free Stock Analysis
L-3 COMM HLDGS (LLL): Free Stock Analysis
LOCKHEED MARTIN (LMT): Free Stock Analysis
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The contract is a multiple-award
indefinite-delivery/indefinite-quantity ("IDIQ") order and
expected to be finished in November 2017. The base year value of
this agreement is $179.9 million. The Space and Naval Warfare
Systems Center Atlantic, Charleston, South Carolina is the
contracting authority for this agreement.
Per the contract, the companies will not only provide devoted
hardware services, but will also develop, incorporate and examine
the intelligence, battle-space awareness and information process
Battlespace awareness is a military application utilized by the
commanders to foresee the courses of action before positioning
their troops and platforms into the area of operations. This
process highly depends on a collection of intelligence to make
commanders aware of the latest situations of the battle field.
From the past contract history, it is evident that Lockheed
Martin has a strong pact with the U.S. Navy and tries to meet its
commitments in terms of maintaining products and services quality
along with delivery timing. Few days ago, the company entered
into an agreement, worth $30 million, with the navy to put
together new avionics and software on multiple C-130T aircrafts.
We believe that strong relationship along with loyal alliance
between both the parties has helped Lockheed Martin to become one
of the recipients of this contract.
We know that the U.S. administration is currently focusing on the
Intelligence Surveillance Reconnaissance ("ISR"), unmanned
systems, force protection, cybersecurity, and missile defense. In
the present context, we consider this contract as a fresh oxygen
provider for the company. The successful completion of this deal
will enable Lockheed Martin to get more contracts from the U.S.
defense establishment in the future and will subsequently improve
the company's forthcoming contract pipeline.
In addition, we appreciate Lockheed Martin's continuous effort
toward improving shareholders' return supported by its focus on
steady debt repayment plans, ongoing share repurchase program and
stable increase in dividend.
However, we are skeptical about the budget deficits and political
ambiguity, which might lead to future defense budget-cutbacks.
Lockheed Martin Corporation currently has short-term Zacks #3
Rank (Hold 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
sustainment of advanced technology systems, products and
services. With a market capitalization of $28.43 billion, the
company has 123,000 full time employees.