Cytec Industries Inc. (CYT) has extended a contract with Lockheed Martin Corporation (LMT) to deliver high-performance, structural composite and adhesive materials that are utilized for the manufacture of the multinational Joint Strike Fighter (JSF). The contract is extended for the period 2016 through 2020 and is expected to generate revenues of approximately $1.1 billion.
Under the contract, Cytec supplies a deep and rich portfolio of more than 50 products to the JSF program. It includes CYCOM 5250-4, a bismaleimide pre-impregnated system that improves the performance capability at high temperatures, industry standard CYCOM 977-3, a toughened epoxy resin prepreg system and FM 309-1, a lightning strike protection surfacing film.
Cytec’s team has worked closely with Lockheed Martin and its subcontractors to develop engineered material solutions that will readily meet the JSF program’s extremely demanding requirements.
The JSF or the F-35 Lightning II Program is the Department of Defense's focal point for defining affordable, next-generation strike aircraft for the Navy, Air Force, Marines, as well as international US allies spanning nine countries.
The stealthy F-35 that weighs approximately 42.0% in composite is a supersonic, multi-role fifth-generation fighter. The aircraft is intended to replace AV-8B Harriers, A-10s, F-16s, F/A-18 Hornets and United Kingdom Harrier GR.7s and Sea Harriers.
Lockheed Martin Corporation is expected to register a stable performance due to a 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.
However, tepid recovery of the U.S. economy, budget deficits and political uncertainty, and a sizeable pension liability compel us to maintain our long-term Neutral recommendation on the stock. The company presently retains a short-term Zacks #3 Rank (Hold).
Recently, Cytec Industry, the specialty chemical company, reported first quarter 2011 pro forma EPS of 78 cents per share versus its 58 cents per share in the prior-year period. Lockheed Martin is expected to release its first quarter 2011 results on April 26, 2011.
Going forward, the Zacks Consensus Estimates for first quarter 2011 and fiscal year 2011 are currently at $1.51 per share and $7.00 per share, respectively.
Lockheed Martin is the largest defense contractor in the world. The company’s customer base includes the U.S. government, foreign governments, and other commercial buyers.
CYTEC INDS INC (CYT): Free Stock Analysis Report
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