Lockheed Martin Corp.
) was able to seal two contracts from the U.S. Department of
Defense (DoD) on Sep 13, 2013.
The first contract, worth $75.7 million, is a modification to the
previously awarded F-35 Lightning II Low Rate Initial Production
Lot 6 (LRIP) Advance Acquisition contract. Per the recent
contract, which runs through Dec 2018, the company will receive
extra funding from the DoD for redesigns of certain F-35 spare
parts that are at risk of supply-chain disruptions due to
"diminishing manufacturing sources".
In August, the company also 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 was a
modification contract to an existing contract that called for
Lockheed Martin to supply particular tooling and special test
equipment for the U.S. Navy, U.S. Air Force and their
international associates. These are critical in maintaining the
current F-35 delivery schedules and meeting future production
Besides the LRIP modification contract, the defense major also
won a $15.2 million "un-priced letter" contract from the DoD on
Sep 13. Per this contract, the company will provide long lead
material required for Trident II D5 Missile production scheduled
for fiscal 2014. This one runs through Sep 30, 2018.
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.
Despite the cuts in defense spending and the threat of
sequestration, the company has been able to seal many contracts
from the DoD. Its better-than-expected second quarter earnings on
the back of strong operational performance also drove the
management to raise its full-year earnings guidance to $9.20-9.50
ALLIANT TECHSYS (ATK): Free Stock Analysis
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Lockheed Martin presently retains a short-term Zacks Rank #2
(Buy). Other well-placed operators include
Northrop Grumman Corp.
Alliant Techsystems Inc.
). While Alliant Techsystems carries a Zacks Rank #1 (Strong
Buy), Northrop and Raytheon hold a Zacks Rank #2 (Buy).