Lockheed Martin Corporation
(
LMT
) has won a bid against CH2M Hill and has received a multi-year
contract worth $2 billion to support the National Science
Foundation's ("NSF") Antarctica operations. The company will
provide support infrastructure to the U.S. Antarctic Program that
conducts research at the South Pole.
The company had initially received the contract in December
2011. Later, CH2M Hill filed a protest with the Government
Accountability Office ("GAO") as it claimed to have provided cold
weather support to NSF in the Arctic earlier.
National Science Foundation manages the program and provides
logistics and infrastructure for federal agencies to conduct their
research there. Per the deal, the company will be responsible for
modernization of technologies that will transport scientists, staff
and supplies to and from the Antarctic region. It will render
services like maintaining computer networks so that they operate
well even in the challenging conditions, installing light bulbs and
providing food stuff and supplies among other duties.
Besides technological innovations, the company will set up a
cost-effective streamlined infrastructure that will supervise three
work stations located in the South Pole, McMurdo and Palmer and
medical facilities, research vessels, construction projects and
remote sites in and around Antarctica.
On the whole, we expect the company to register a stable
performance due to a leveraged presence in the Army, Air Force,
Navy and IT programs. Also, shareholder return will continue to be
shored up by the company's focus on debt repayment and its ongoing
share repurchase program. Lockheed Martin posted strong results for
the first quarter of 2012 with operating earnings of $2.02 per
share beating the Zacks Consensus Estimate of $1.70. This was also
higher than the year-ago quarterly earnings of $1.55 per share.
However, the impact of the Euro-crisis on U.S. economic
fundamentals keeps the risk high for further cutbacks in defense
budgets. The company presently retains a short-term Zacks #3 Rank
(Hold) that corresponds with our long-term Neutral recommendation
on the stock.
Lockheed Martin is the largest defense contractor in the world.
The company's customer base includes the U.S. government, foreign
governments, and other commercial buyers. The company mainly
competes with
The Boeing Company
(
BA
).
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