A Lockheed Martin Corp. LMT unit, Lockheed Martin Aeronautics Co., of Fort Worth, TX, won a contract from the U.S. Air Force to provide contractor logistics support or CLS for Iraqi F-16 fighter jets based at Balad Air Base, Iraq. The prime defense contractor claimed the day’s biggest contract by dollar value yesterday. The contract is worth $119.2 million.
Per this foreign military sales (“FMS”) contract, the work will be performed at Balad Air Base, Iraq, with ongoing CLS support activity in Tucson, AZ; Fort Worth, TX; and Greenville, SC. It is scheduled to be completed by Aug 31, 2016.
The Iraqi government purchased 36 F-16 Fighting Falcon jets with the plan of taking delivery in Iraq and to train pilots there. However, the invasion of the Islamic State of Iraq and the Levant made logistics unfeasible. Hence, the arrangement was shifted to Arizona’s Air National Guard in Tucson. Iraq has already received the first two F-16s in Dec 2014.
Lockheed Martin has customized the F-16s configuration to meet the specific requirements of the Iraqi Air Force, and the contract includes mission equipment and a support package provided by Lockheed Martin and other U.S. and international contractors. The company has produced over 4,500 F-16s and developed upgrade programs for 11 countries to date.
Lockheed Martin has been on a winning spree in recent times. The continuous inflow of contracts speaks of its inherent strength. FMS remains the key tool for expanding the top line of the U.S. defense primes. They are constantly on the lookout for more international contracts to keep their top lines rolling. Approximately 20% of Lockheed’s 2014 revenues came in from international customers, including FMS. This mix is expected to rise going forward.
Lockheed Martin currently carries a Zacks Rank #2 (Buy). Some other well-placed stocks in the aerospace and defense space include The Boeing Co. BA, General Dynamics Corp. GD and Northrop Grumman Corporation NOC, all carrying a Zacks Rank #2.
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