Lockheed Martin Corp.
) received contracts from the U.S. Department of Defense (DoD) on
Aug 20, 2013. The DoD granted a total of eight contracts. Among
the other award winners were
), BAE Systems, Odyssey International Inc. and Berger Cummins
Joint Venture. Lockheed was the winner in terms of the total
number of contracts won, while Textron was the winner in dollar
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Lockheed received two contracts and won a major part of the third
contract. Per the first contract worth $37.3 million, Lockheed
will perform engineering work on the Aegis air-defense platform.
The company will be working on this modification contract through
Per the second contract, the company will supply a single
AN/BVY-1 Integrated Submarine Imaging System, plus associated
spare parts, to the U.S. Navy for $10.1 million.
The third contract worth $8.2 million was awarded to Hellfire
Systems LLC, which is a wholly owned subsidiary of Lockheed
Martin. The majority of the fund will be received by Lockheed
Martin, while a small part will go to
The Boeing Company
), the former partner of Lockheed in Hellfire LLC. Per the
contract, Hellfire Systems will produce Hellfire II air-to-ground
missiles for the United Arab Emirates. This firm-fixed-price,
no-option, foreign military sales Hellfire contract modification
now has a value of more than $886 million.
Meanwhile, Textron has received a contract worth $641 million for
the production of 1,300 cluster bombs for Saudi Arabia. The
contract runs through 2015.
Despite the threat of sequestration and defense budget cuts, the
big defense players are not lacking in DoD contracts. Recently,
Lockheed Martin received a contract worth $852.3 million from the
DoD to provide the required equipment for F-35 fighter jets under
Low Rate Initial Production Lot 6. This contract is slated for
completion in Dec 2016.
Lockheed Martin is the largest U.S. defense contractor with a
platform-centric focus that guarantees a steady inflow of
follow-on orders from a leveraged presence in the Army, Air
Force, Navy and IT programs. Going forward, we believe Lockheed
Martin has significant upside potential based on its Intelligence
Surveillance Reconnaissance, unmanned systems, force protection,
cyber security, and missile defense programs.
On the other hand, Textron has a strong presence in diverse areas
of business jets and other general aviation aircraft, helicopter,
aircraft engines, golf carts, turf maintenance equipment,
electronic test equipment and blow-molded fuel tanks.
Lockheed Martin presently retains a short-term Zacks Rank #2
(Buy) while Textron retains a short-term Zacks Rank #3