Lockheed Martin Corporation
) has been awarded a firm fixed-price contract, worth $27 million,
by the U.S. Navy. Per the agreement, the company will manufacture
parts of 22 units of Vertical Launch anti-submarine ("VLA")
missiles for the U.S. Navy. The components would be manufactured at
the company's Akron facility in Ohio.
The VLA missile is a supersonic, quick-attack anti-submarine
warfare weapon. This missile is useful in open-ocean and littoral
waters and can be launched from cruisers and destroyers. The
missile system takes the lightweight torpedo to the assigned target
area where it positions itself to thwart an attack.
The efficiency and accuracy of the VLA missiles has increased
the confidence of the naval forces around the world. Consequently,
they have expressed their interest in these missiles. Apart from
the U.S. Navy, Lockheed has supplied VLA missiles to the Japanese
Maritime Self Defense Force through a blend of Foreign Military
Sales ("FMS") and direct commercial sales agreement.
Lockheed has a strong relationship with the U.S. Navy. In April
2012, the U.S. Navy awarded Lockheed Martin a five-year contract,
worth $1.05 billion, to provide approximately 200 digital cockpits
and integrated mission systems and sensors for the Navy MH-60S
"Sierra" and MH-60R "Romeo" helicopters.
We view Lockheed Martin as a well-positioned organization with
its successful delivery of missiles and guided weapons, aircrafts,
radars, information technology management services, infrastructure
and applications to the U.S. and several other international
defense forces. As the world's largest standalone defense
contractor, Lockheed Martin has a strong contract pipeline.
Lockheed Martin ended the first quarter of 2012 with $76.6 billion
On the flip side, we must remember that a large percentage of
Lockheed Martin's business comes from the U.S. government. The U.S.
government is planning to curtail its defense spending to meet
deficit reduction targets. This can negatively impact the company's
top and bottom line performance in the future.
During first quarter 2012 earnings, Lockheed Martin affirmed its
full year 2012 earnings to be in the range of $7.70 - $7.90 per
share. The Zacks Digest Estimate for second quarter 2012 and full
year 2012 earnings is pegged at $1.91 and $7.90 per share,
Lockheed Martin Corporation currently retains a Zacks #3 Rank,
which translates into a short-term Hold rating. The company
Northrop Grumman Corporation
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
maintenance of advanced technology systems, products and
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