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Lockheed Wins $55M Deal to Procure CH-53K Aircraft Parts

Zacks Equity Research

Lockheed Martin Corp.’s LMT business unit, Sikorsky, recently clinched a contract for procuring 3,754 interim spare parts for the CH-53K heavy lift helicopter. The deal has been awarded by the Naval Air Systems Command, Patuxent River, MD.

Valued at $54.5 million, the contract is scheduled to be completed by April 2023. Apart from the spare parts procurement, Sikorsky will also offer support for the repair and maintenance of the CH-53K aircraft configuration.

Majority of the work related to the deal will be executed at different locations within continental United States.

Growing Helicopter Demand & Lockheed

A rapid increase in terror attacks has compelled nations to strengthen their arsenal and bump up defense budget. With the United States being the largest exporter of defense equipment across the world, the nation enjoys a steady flow of contracts for its combat-proven weaponries from both Pentagon and its foreign allies.

With military jets and helicopters constituting a major portion of a nation’s armaments, there is a steady flow of contracts for these weaponries. The latest contract win by Lockheed Martin is an instance of that.

Notably, Lockheed’s Sikorsky business line has been one of the major forerunners in the U.S. combat helicopter space. It provides military and rotary-wing aircraft to all five branches of the U.S. armed forces along with military services and commercial operators in 40 nations.

Deal Benefits for Lockheed

As demand for helicopters is rising, so is the need for making these jets even more invincible through frequent upgrades.  Notably, Lockheed Martin’s infrared sensor systems provide advanced precision targeting, navigation, threat detection and next generation intelligence, surveillance and reconnaissance capabilities.

We believe integration of the Digital Magnetic Anomaly Detection sensor into the MH-60R helicopter will make these aircraft even more desirable in the combat helicopter market and usher in more contracts for the company in the coming days. These in turn bolster Lockheed’s growth prospects.

Looking Ahead

Per a Morder Intelligence report, the global attack helicopter market is expected to witness CAGR of more than 4% during 2020-2025 time period, thanks to rise in global threats, geopolitical instabilities and increased spending on defense. These projections should continue to boost growth for major combat helicopter producers like Lockheed, Textron TXT, Airbus EADSY and Boeing BA.

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