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Lockheed Martin (LMT) Secures DoD Contracts worth $325M

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Lockheed Martin Corp. LMT has won four contracts, worth $325.1 million in total, from the U.S. Department of Defense’s (“DoD”) daily funding list on Mar 11.

Among these, the contract with the highest value was awarded by the U.S. Navy to Lockheed Martin’s Mission Systems and Training unit. It has a maximum value of $93.4 million. Per the contract, the company will design the Trident II Inertial Navigation Subsystem (INS), and provide technology development efforts for Shipboard Systems Integration (SSI) Increment 8 and SSI Increment 13. It will also deliver eight INSs and related test plans and reports, along with gyroscope, modeling and simulation efforts. The company will also provide design for hardware and software, with short-term modifications for supporting performance at sea; incorporate the Electrostatically Supported Gyro Navigator-Replacement into the navigation subsystem; commence production activities leading to an SSI Increment 8 initial operational capability; and undertake Multi-Star Enhanced Prelaunch responsibilities.

Work is scheduled to be complete by Nov 30, 2017. Majority of the work will be performed in Mitchell Field, NY while the rest will be carried out in Huntington Beach, CA; Clearwater, FL; and Cambridge, MA.

The second one, worth $92.4 million, is a modification contract secured by Lockheed Martin’s Aeronautics unit from the Air Force for the production of the C-130J aircraft. The contract covers foreign military sales (“FMS”) to Israel. Work is scheduled to be complete by Jul 5, 2016 and will be performed in Marietta, GA.

The Army has also awarded a $73.0 million modification FMS contract to Lockheed Martin’s Missiles and Fire Control unit, to exercise an option for the addition of 64 1-pack Missile Segment Enhancement missiles and reducing 64 Cost Reduction Initiative missiles in the PATRIOT. Work is scheduled to be complete by Jun 30, 2019.

The company’s unit, Aeronautics Co., has won another Navy modification contract worth $66.2 million to design, develop, manufacture, incorporate, deliver, install, and test the technical solution to allow full interoperability of the Distributed Mission Training potential for the F-35 Joint Strike Fighter aircraft.

Work is scheduled to be complete by Mar 2018 and majority of the work will be performed in Orlando, FL. Rest of the work will be carried out in Fort Worth, TX.

Lockheed Martin is the largest U.S. defense contractor, with a platform-centric focus that guarantees a steady inflow of follow-on orders from its leveraged presence in the U.S. Army, Air Force, Navy and IT programs.

Zacks Rank & Key Picks in the Sector

Lockheed Martin currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the aerospace and defense equipment industry include HEICO Corporation HEI, AeroVironment, Inc. AVAV and Spirit AeroSystems Holdings, Inc. SPR. While HEICO Corporation sports a Zacks Rank #1 (Strong Buy), both AeroVironment and Spirit AeroSystems carry a Zacks Rank #2 (Buy).

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