Lockheed Martin Corp.
) turned out to be the major beneficiary of the 20 contracts,
worth $717.7 million, handed out by the Department of Defense
(DoD) very recently. Indeed the company secured four contracts
that comprised nearly 20% of the entire award from the DoD.
ABM INDUSTRIES (ABM): Free Stock Analysis
ERICKSON AIR-CR (EAC): Free Stock Analysis
EMCORE CORP (EMKR): Free Stock Analysis
LOCKHEED MARTIN (LMT): Free Stock Analysis
To read this article on Zacks.com click here.
Discussed below is the series of contract wins by the largest
defense contractor in the world.
Lockheed Martin received a cost-plus-incentive-fee,
firm-fixed-price contract worth $111.5 million for the
development, integration and production of AN/SQQ-89A (V) 15
Surface Ship Undersea Warfare Systems. This system allows a
surface warship to detect and track marine contacts and torpedo
threats. The task will be performed under a foreign military
sales contract for the Japan Self-Defense Force. It is expected
to be completed by May 2014.
The second contract worth $29.7 million was a sole-source,
cost-plus-incentive-fee contract modification. Per the contract,
Lockheed Martin will provide system engineering and program
management services for the post certification support of Aegis
Ballistic Missile Defense baselines 4.0.X, 5.0 and 5.0 capability
upgrade. This contract will increase the contract value to $1.44
billion from $1.41 billion. This contract extension runs through
The third $48.2 million firm-fixed-price, multiple-award,
task-order is on a sharing basis. This modification contract to
provide engineering services to the U.S. Army Corps of Engineers
will be carried out by Lockheed Martin,
ABM Industries Inc.
), LB&B Associates, J&J Maintenance, and
Finally, as per the cost-plus-fixed-fee contract worth $8.2
million, the company will supply Affordable Phased Array Sensor
Systems to the U.S. Army.
Lockheed Martin's order book seems to be overflowing at present
with its customer base comprising the U.S. government, foreign
governments and other commercial buyers. Going forward, we
believe that the company has significant upside potential based
on the Obama administration's focus on Intelligence Surveillance
Reconnaissance, unmanned systems, force protection, cyber
security, and missile defense.
However, as a large percentage of the company's business comes
from the U.S. government, we apprehend cuts in defense spending
could limit the the company's operating results. 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.