Lockheed Martin Corp.
) won a major contract from the Pentagon in its funding list of
Mar 10. Of the $1.6 billion worth of contacts dispersed
yesterday, Lockheed Martin emerged as the biggest winner with an
award valued at $698.9 million.
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Lockheed Martin received funding for the construction of two
Littoral Combat Ship (LCS). The Naval Sea Systems Command,
Washington, D.C., is the contracting authority. This contract
calls for Lockheed Martin to perform basic seaframe construction
on two LCS, purchase select systems equipment for installation
aboard the vessels, and integrate and test this equipment.
The contract - which runs through Aug 2018 - does not cover the
full cost of building the LCS. These two vessels are expected to
cost somewhere between $400 million to $800 million each upon
An LCS is a type of relatively small surface vessel intended for
operations in the littoral zone. These are well designed to
tackle rapidly changing global threats and provide a
cost-effective solution in the current climate of tight budgets.
Work on the contract will mainly be performed in Marinette, Wis.
(56%); Walpole, Mass. (14%); Washington, D.C. (12%); Oldsmar,
Fla. (4%); Beloit, Wis. (3%); Moorestown, N.J. (2%); and
Minneapolis, Minn. (2%).
Lockheed Martin is the world's largest stand-alone defense
contractor with a platform-centric focus and a steady inflow of
follow-on orders due to its leveraged presence in the Army, Air
Force, Navy and IT programs. The company has succeeded in beating
the top as well as the bottom line in its fourth quarter 2013.
Despite the uncertainty plaguing the industry, the company
continued to grow its backlog and generate strong cash from
operations while maintaining its cash deployment strategy. It has
been able to generate $15.4 billion in orders in the fourth
quarter of 2013. Going forward, varied product offerings, strong
program execution and cost reduction measures will help the
company to sustain its profitability.
Lockheed Martin has a Zacks Rank #2 (Buy). Other defense stocks
also worth considering are
Huntington Ingalls Industries, Inc.
Northrop Grumman Corp.
). Huntington Ingalls Industries sports a Zacks Rank #1 (Strong
Buy), while Embraer and Northrop Grumman carry a Zacks Rank #2