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Lockheed Martin (LMT) Wins $195M Deal to Support F-35 Program

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Lockheed Martin Corp.’s LMT business unit, Aeronautics, recently clinched a modification contract involving the F-35 Joint Strike Fighter program. The deal has been awarded by Naval Air Systems Command, Patuxent River, MD.

Details of the Deal

Valued at $194.7 million, the contract is expected to get completed by April 2024. Per the terms, Lockheed will offer non-recurring engineering, integration and testing of the aircraft interface module to support ASQ-239 electronic warfare/countermeasures system upgrades planned for F-35 aircraft deliveries.

Majority of the work related to this deal will be executed in Nashua, NH.

Rise in Demand Aids F-35 Program

The rise in global terrorism and adverse geopolitical situations has increased the need for enhancing the nation's defense budget, a major portion of which is allocated to combat aircraft. The F-35 program is supported by an international team of leading aerospace majors, such as Northrop Grumman NOC , BAE Systems BAESY and Pratt & Whitney, a unit of Raytheon Technologies RTX . Notably, Northrop Grumman rendered its expertise in carrier aircraft and low-observable stealth technology to this program. Also, BAE Systems’ short takeoff and vertical landing experience, and air systems sustainment supported the jet’s combat capabilities. Pratt & Whitney offered its combat-proven engine to this jet.

Such features have enabled the F-35 jet to dominate the combat aircraft market, buoyed by solid demand as evident from the program’s frequent contract wins, both from Pentagon and other U.S. allies. The latest contract win is a bright example of that.

Growth Prospects

As of Mar 28, 2021, Lockheed Martin delivered 628 F-35 airplanes since the program's inception with 339 jets still in backlog. This surely boosts sales expectation for the Aeronautics business segment in the coming days.

Moreover, the production of F-35 jets is expected to continue for many years, given the U.S. government's current inventory target of 2,456 aircraft for the Air Force, Marine Corps and Navy. Consequently, we expect Lockheed Martin to witness more order inflows for F-35, like the latest one, which in turn should bolster this defense contractor’s top line.

Price Movement and Zacks Rank

Shares of this Zacks Rank #3 (Hold) company have gained 8.8% in the past year compared with the industry’s improvement of 29.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Northrop Grumman Corporation (NOC) : Free Stock Analysis Report

Bae Systems PLC (BAESY) : Free Stock Analysis Report

Lockheed Martin Corporation (LMT) : Free Stock Analysis Report

Raytheon Technologies Corporation (RTX) : Free Stock Analysis Report

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