Lockheed Martin Corp. LMT secured a big contract, worth $870 million, yesterday from the Pentagon’s daily funding list. The U.S. military awarded Lockheed Martin a contract to continue developing the ballistic missile defense (“BMD”) command and control program that enables senior U.S. officials to plan BMD operations.
The contract calls for Lockheed Martin to continue engineering, development, test, integration, fielding and on-site operations and sustainment support for the command and control, battle management and communications (“C2BMC”) system located worldwide for the Ballistic Missile Defense System.
This is a modification contract that brings the cumulative value to $2.1 billion from $1.2 billion. The work is expected to be completed by Dec 31, 2021. Lockheed Martin plans to perform the work in Arlington, VA; Huntsville, AL; and Colorado Springs, CO.
C2BMC is the critical integrating command and control function that provides commanders with a unified picture of missile threats across the globe. It provides warfighters with a reliable, flexible and real-time capability to plan, monitor and manage the defense of the U.S., its deployed forces, and associates or allies against ballistic missile threats.
Lockheed Martin is the largest defense contractor in the world. The company enjoys a steady flow of contracts both from the U.S. Department of Defense and international customers.
Recently, Lockheed Martin along with European defense group MBDA has been chosen by Germany for their jointly developed Medium Extended Air Defense System or MEADS for the country’s tactical air and missile defense, edging out competition from Raytheon’s RTN Patriot system. The deal, worth around $4.5 billion, is expected to give a financial boost to Lockheed Martin's plant in suburban Syracuse, where the MEADS surveillance radar is manufactured.
Earnings of the prime contractor, Lockheed Martin, fell about 4.5% in the first quarter of 2015 as the company struggled to keep up fighter jet demand. Though it managed to beat the Street estimate by 10.5% on earnings, its total revenues missed the mark by almost 1% and declined 5.1% year over year.
Its Aeronautics, Information Systems & Global Solutions as well as Missiles and Fire Control segments suffered from lower demand. Specifically, Missiles and Fire Control saw a double-digit drop-off in sales and profits.
Hence, a steady contact flow will likely aid Lockheed Martin’s Missiles and Fire Control segment to regain its traction.
Lockheed Martin currently carries a Zacks Rank #2 (Buy). The Boeing Co. BA and Northrop Grumman Corp. NOC are equally well-placed stocks in the defense space, both carrying a Zacks Rank #2.
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