Lockheed Martin Corp.
) received a contract from the Department of Defense (DoD) worth
$138.5 million to provide Communications Technical Support
Services ("CTSS") to the U.S. Air Force Central Command.
Per this contract, the company will supply important information
to forward-deployed forces in Operation Enduring Freedom
(Afghanistan) and Operation New Dawn (Iraq).
The CTSS program will also deliver critical information to forces
deployed in other parts of Southwest Asia. The company will begin
providing services from Sep 2013 which will continue through Sep
20, 2014. The contract also has an option to be extended for
three months, which if implemented would extend the contract
through Dec. 20, 2014.
The DoD has recently been doling out contracts to the defense
companies. Lockheed Martin among others has been a key
beneficiary of these awards. Recently, Mission Systems and
Training, a business wing of Lockheed Martin, won a $295 million
contract from the DoD for work on the Aegis missile defense. This
is a sole-source,
incentive fee contract modification, under which Lockheed Martin
will provide system engineering and program management services.
Prior to that, Data Link Solutions,
Alliant Techsystems Inc.
FLIR Systems Inc.
) and Lockheed Martin also received a number of DoD contracts. A
total of 22 contracts were issued that had a cumulative value of
less than $500 million.
Going forward, we expect Lockheed Martin to benefit from a strong
defense focus on a number of its platform programs, such as the
C-130 Hercules & C-5 Galaxy transport aircrafts, F-16
Fighting Falcon multi-role jet, MH-60 Helicopters, the Advanced
Extremely High Frequency & the Global Positioning Satellite
III system satellites, the Littoral Combat Ship, the Aegis
Weapons System for mobile and sea-based missile defense and the
Terminal High Altitude Area Defense system.
Despite the lurking fears of sequestration and its adverse impact
on U.S. defense budgets, we expect Lockheed Martin to register a
stable performance in the long run due to a leveraged presence in
the Army, Air Force, Navy and IT programs. The company presently
retains a short-term Zacks Rank #3 (Hold).
In the near term, we would advise investors to accumulate its
short-term Zacks Rank #1 (Strong Buy) peer
Erickson Air-Crane Inc.
ALLIANT TECHSYS (ATK): Free Stock Analysis
ERICKSON AIR-CR (EAC): Free Stock Analysis
FLIR SYSTEMS (FLIR): Free Stock Analysis
LOCKHEED MARTIN (LMT): Free Stock Analysis
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