Lockheed Martin’s LMT newly acquired unit, Sikorsky Aircraft Corp., won two contracts, worth $939.8 million in total from the U.S. Army.
The $833.3 million contract modification under a general U.S. Army sustainment contract runs through Dec 31, 2016. Under this contract, Stratford, CT-based Sikorsky will provide sustaining, Army fixed engineering sustaining, program management/systems engineering sustaining, Army provisioning, Army technical publications, other integrated logistics support, contractor manpower reporting, packaging handling storage and transportation, and advance procurement funding.
Separately, Sikorsky also won a contract worth $106.5 million to provide technical, engineering, logistics services and supplies, and 100% parts support for the H-60 weapons system. This contract will run through Nov 30, 2016.
In Nov 2015, Lockheed Martin acquired Black Hawk helicopter maker Sikorsky Aircraft from United Technologies UTX for $9 billion in cash. The deal bolstered Lockheed Martin’s position as the world’s largest defense contractor, pushing it deeper into the military helicopter business. It was the largest transaction for the company in more than two decades. In 1994, the defense prime had acquired Martin Marietta for $10 billion. The company combined Sikorsky with its Lockheed Martin Mission Systems and Training business segment.
Lockheed Martin reported stellar third-quarter results with better-than-expected earnings along with higher revenues, solid margins, and strong cash flows, buoyed by robust sales of its F-35 Joint Strike Fighter. Solid quarterly results also enabled the company to lift its 2015 guidance for sales, operating profit, and EPS. The takeover of Sikorsky opens key foreign markets for Lockheed Martin, extending its core operations into the $30 billion annual military and commercial rotary wing segment.
Lockheed Martin holds a Zacks Rank #3 (Hold). A couple of better-ranked stocks include Boeing BA and General Dynamics Corp. GD, both with a Zacks Rank #2 (Buy).
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