Aerospace and defense company, Lockheed Martin Corporation (LMT) has won a contract from the U.S. Navy for the systems integration of nine MH-60R SEAHAWK helicopters. This $686 million contract is part of the U.S. government’s foreign military sales (FMS) program whereby it will deliver nine MH-60R SEAHAWK helicopters to the Danish government.
The project is executed by a consortium of leading defense companies in the U.S. including Lockheed. The company will act as the mission’s system integration operator. Others include Sikorsky Aircraft, a business arm of United Technologies Corporation (UTX), General Electric Company (GE), Raytheon Company (RTN) and Canada’s CAE Inc. (CAE). These companies will perform as MH-60R airframe manufacturer, engine manufacturer, sensor supplier and training supplier, respectively.
Denmark is the second foreign country to opt for the highly proven MH-60R SEAHAWK helicopters. Earlier Australia bought 24 of these aircraft. The current order is slated to be delivered by 2018.
The highly advanced aircraft is designed for the purpose of anti-surface warfare operations. These aircraft will defend Danish interests in the North Atlantic besides conducting other missions during international deployments and executing anti-piracy tasks.
With the imminent threat of U.S. defense budget cuts, we believe such international orders will provide a respite to Lockheed Martin. Recently, Lockheed acquired Chandler/May Inc., an unmanned aerial systems manufacturer. The company focuses on the design, development, integration, manufacturing, and support of fully integrated mission critical systems. This acquisition will complement Lockheed’s role as a system integrator in the aircraft project as well as in other future collaborative projects. The company retains a short-term Zacks #3 Rank (Hold rating).
Another Zacks #3 Rank defense player, Northrop Grumman Corporation (NOC) received a contract from Indian reseller Marine Electricals Ltd to supply advanced shipboard navigation systems for 20 fast patrol vessels. The systems will be supplied to the Indian Coast Guard.
Lockheed Martin has been a consistent performer posting earnings surprises in the last eight quarters. The Zacks Consensus Estimate for the fourth quarter and full year 2012 presently stand at $1.79 per share and $8.40 per share, respectively.
Based in Bethesda, Maryland, Lockheed Martin is a global security and aerospace company that employs about 123,000 people worldwide with market capitalization of $29.40 billion
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