Lockheed Martin Aeronautics Company, a key unit of Lockheed Martin Corporation (LMT), received a modification contract of $54.6 million from the U.S. Department of Defense (DoD). Lockheed Martin, one of the prime U.S. defense contractors, has been receiving a good many DoD contracts on the back of its diversified product portfolio.
In this current contract, the company will provide non-recurring technical support of the F-35 Lot VII program for the U.S. Navy, U.S. Air Force and other international partner governments. Under this contract, the company will provide manufacturing support and technical knowledge related to F-35 production. Work under this contract is scheduled to complete by Jan 2015.
The F-35 fighter jet is Pentagon’s costliest program. Its unique capabilities and operational efficiency have roped in orders not only from the U.S. military forces but also from allied countries. Though sequestration has negatively impacted Lockheed Martin’s sales, the F-35 warplane despite its many critics continued to find support in 2013. Moreover, the $1.1 trillion Omnibus spending measure President Obama signed into law was a major boost for this defense contractor.
In Mar 2014, Lockheed Martin received a sizable $698 million contract from the DoD. Per the contract, the company will provide the long lead parts, materials and components required for the production of 53 LRIP and Lot IX F-35 JSF.
Despite persistent threats of defense budget cuts, Lockheed Martin seems confident of 2014. For the year, the company has provided an earnings guidance range of $10.25 to $10.55 per share. The current Zacks Consensus Estimate for 2014 at $10.60 is above the high end of the guidance.
Currently, Lockheed Martin holds a Zacks Rank #3 (Hold). Other well-ranked defense players include Huntington Ingalls Industries, Inc. (HII), General Dynamics Corp. (GD) and Northrop Grumman Corp. (NOC). While Huntington Ingalls holds a Zacks Rank #1 (Strong Buy), General Dynamics and Northrop Grumman carry a Zacks Rank #2 (Buy).