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Lockheed Martin (LMT) Wins a Series of Defense Contracts - Analyst Blog

Lockheed Martin Corporation ( LMT ), the prime U.S. defense contractor, received five defense contracts worth approximately $268.8 million from the U.S. Department of Defense (DoD) on Sep 19, 2014. The share price increased 0.7% to $180.74 on Sep 19, 2014 and 22.5% so far this year.

The largest among these contracts was a $146.3 million modification for the procurement of new Trident II (D5) missile production, D5 Life Extension development and production, and D5 Deployed Systems Support. The contract is expected to run through Nov 30, 2019.

Another contract, worth approximately $56.3 million, was also a modification to secure depot partnering activations and depot partnering assessments. Work is slated for completion on Jun 30, 2018.

The third contract, worth $34.2 million, was received by Lockheed Martin Space Systems Co. for the services required for successful activation and support of a Trident II (D5) missile storage facility. The work under this contract includes design, development as well as procurement of facilities, equipment along with processes for D5 missile storage. The work will run through Sep 30, 2019.

Lockheed Martin also received contracts worth $24.9 million and $7.0 million for its Lockheed Martin Aeronautics Co. and Lockheed Martin Information Systems & Global Solutions units, respectively. The contract with its Aeronautics unit was a modification contract that called for the company to realign and increase concurrency funding for post-production concurrency changes to F-35 Lightning II Low Rate Initial Production (LRIP) Lot VI aircraft. The contract with its Information Systems & Global Solutions division includes software maintenance services for Joint Air to Surface Standoff Missile (JASSM). The contractor is entitled to provide enhancements to the software package known as the JASSM Enterprise Management System (JEMS) Phase 3B.

Although the threat of sequestration still lurks over this defense major, negatively impacting the company's second quarter 2014 sales, Lockheed Martin seems to be on a wining spree in recent times clinching both big and small contracts.

The company reported a forecast-beating 4.5% rise in second-quarter 2014 earnings per share, backed by strong operational performance. The company raised its 2014 earnings guidance, reflecting lower pension costs and an improved outlook for its space unit. The company recorded positive earnings surprises in the last four quarters, resulting in an average beat of 16.31%.

Currently, Lockheed Martin holds a Zacks Rank #1 (Strong Buy). Other well-ranked defense players include The Boeing Co. ( BA ), General Dynamics Corp. ( GD ) and Northrop Grumman Corp. ( NOC ), all with a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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