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Lockheed Martin Wins $38 Navy Deal to Support CH-53K Program

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Lockheed Martin Corp .'s LMT business unit, Sikorsky, recently secured a $38.2-million contract for developing and delivering technical information database related to the CH-53K program. This would include 2D drawings for further supporting organizational, intermediate and depot level initial operational capabilities for the program. The contract was awarded by the Naval Air Systems Command, Patuxent River, Maryland.

Work related to the deal will be executed in Stratford, Connecticut, and is expected to get completed in November 2023.

A Brief Note on the CH-53K Program

The CH-53K helicopter advances Sikorsky's 50 years of manufacturing and operational success with its CH-53A, CH-53D/G and CH-53E predecessors. The new heavy lifter allows the U.S. Marine Corps and international militaries to move troops and equipment from ship to shore, and to higher altitude terrains more quickly and effectively. It is also effective for handling missions like humanitarian aid, troop transport, casualty evacuation, support of special operations forces, and combat search and rescue (CSAR).

What Favors Lockheed Martin?

In recent times, military helicopters in the U.S. aerospace-defense market have gained importance, and thus gained significant traction due to advancements and integration of new tactical, logistical and other important features. Some of these developments have also been made by Lockheed Martin, thereby paving the way for this defense giant to acquire valuable helicopter-related contracts in recent times.

During third-quarter 2018, revenues at Lockheed Martin's Rotary and Mission Systems (RMS) business segment increased 14.4% year over year, partially driven by higher volume of sales for its Sikorsky helicopter programs. We can therefore anticipate Lockheed Martin's RMS unit to generate similar top-line growth in days ahead, based on consistent order flows from Pentagon, like the latest one.

Looking Ahead

Per ASDMedia BV, the global military and government helicopter market is projected to see a CAGR of 8.4% to $13.9 billion by 2020, where medium-lift type helicopters are expected to dominate the market. Such projections seem favorable for premier military helicopter makers like Lockheed Martin.

Price Movement

Lockheed Martin's stock has declined 7.6% in the past year compared with the industry 's drop of 0.1%. The underperformance may have been caused by the intense competition the company faces in the aerospace-defense space for its broad portfolio of products and services, both domestically and internationally.

Zacks Rank & Other Key Picks

Lockheed Martin currently carries a Zacks Rank #2 (Buy).

A few other top-ranked companies in the same sector are Aerojet Rocketdyne Holdings AJRD . Raytheon Company RTN and The Boeing Company BA .

While Aerojet Rocketdyne sports a Zacks Rank #1 (Strong Buy), Raytheon and Boeing carry a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

Aerojet Rocketdyne came up with average positive earnings surprise of 19.27% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has increased 43.3% to $1.82 in the past 90 days.

Raytheon delivered average positive earnings surprise of 6.71% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has moved up 1.7% to $10.10 cents in the past 90 days.

Boeing delivered average positive earnings surprise of 28.01% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has moved up 3% to $15.05 in the past 90 days.

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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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