Lockheed Receives Saudi Contract - Analyst Blog

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Lockheed Martin Corporation ( LMT ) has entered into an agreement, worth $253 million, with the Royal Saudi Air Force (RSAF) to provide assistance for the latter's F-15SA pilot and maintenance training systems. Lockheed Martin's Mission Systems and Training business will be responsible for this contract.

Per the contract, Lockheed Martin will offer a complete ground-based training setup for Saudi Arabia's F-15SA modernization program. Utilizing this technology, pilots will engage in air-to-surface combats, air-to-air warfare, air combat tricks and strategic intercepts with 360-degree full mission trainers. The company will also offer avionics, egress and desktop trainers for procedure training by pilots.

In addition, Lockheed Martin will provide virtual systems, which will enable training without the actual aircraft. This offering includes basic maintenance, armaments, landing gears and arresting hooks, flight controls and jet fuel starter trainers. The company will roll out the deliveries from its facilities at Akron, Ohio, and Orlando, Fla. The deliveries are expected to be complete by 2020.

Lockheed Martin has been associated with Saudi Arabian defense establishments for long and even acted as an F-15 training partner for more than three decades. In Feb 2013, Lockheed Martin set up its Saudi Arabian headquarters in Riyadh to strengthen its strategic alliance with the country.

Bethesda, Md.-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.

The U.S. Department of Defense is one of the major customers of the company and therefore any cutbacks in the U.S. defense budget could limit Lockheed Martin's future growth prospects. To manage domestic order curtailments, most of the U.S. defense players are now expanding their operations outside the U.S. particularly in the Middle East.

In Jan 2013, Lockheed Martin's peer General Dynamics Corporation ( GD ) received an order, worth $132.7 million, from the Kingdom of Saudi Arabia for the procurement and production of 69 Saudi M1A2 (M1A2S) Abrams tanks.

Lockheed Martin Corporation currently has a Zacks Rank #2 (Buy). Other stocks from the sector that are presently performing well include Ducommun Inc. ( DCO ) with a Zacks Rank #1 (Strong Buy) and The Boeing Company ( BA ) with a Zacks Rank #2 (Buy).



BOEING CO (BA): Free Stock Analysis Report

DUCOMMUN INC DE (DCO): Free Stock Analysis Report

GENL DYNAMICS (GD): Free Stock Analysis Report

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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: BA , DCO , GD , LMT

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