Lockheed Martin Corporation (LMT) has received a $100.5 million contract from the U.S. Air Force for the production of paveway II Plus Laser Guided Bomb GBU-12 guidance kits.
The award to Lockheed Martin represents part of a $475 million five-year, firm-fixed-price, multiple-award procurement plan announced by the U.S. Air Force on August 1, 2011. Lockheed Martin's paveway II Plus Laser Guided Bomb guidance kits significantly improve weapon accuracy. The company will begin deliveries on the aforementioned contract in 2012.
GBU-12 bombs are manufactured by both Lockheed Martin and Raytheon Company (RTN). Raytheon entered the GBU-12 fray after purchasing the product line in 1997 from Texas Instruments Inc. (TXN).
Lockheed Martin's LGB kits can be carried on U.S. Air Force, U.S. Navy and most international aircraft platforms currently authorized to carry and release laser guided bombs. The paveway II Plus bombs do not require upgrades or modifications to aircraft, and ground handling equipment or logistics support. Lockheed Martin has delivered more than 55,000 laser guided bomb kits to the U.S. Air Force, U.S. Navy and international customers.
Going forward Lockheed Martin is expected to register a stable performance driven by its leveraged presence in the Army, Air Force, Navy and IT programs. Also, the company’s focus on debt repayment, its ongoing share repurchase program and the incremental dividend will continue to shore up shareholder return.
We, moreover, believe market pessimism is fully accounted for in the current valuation, which is priced at a discount to both industry peers and the overall market. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.
Headquartered in Bethesda, Maryland, Lockheed Martin is a global security company that is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services.
LOCKHEED MARTIN (LMT): Free Stock Analysis Report
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TEXAS INSTRS (TXN): Free Stock Analysis Report
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