Pentagon’s prime contractor Lockheed Martin Corp.’s LMT business unit, Lockheed Martin Missiles & Fire Control (“MFC”), has received a $226.9 million fixed-price-incentive, foreign military sales contract from the U.S. Army for the procurement of several rockets. These include the unitary rocket, reduced range practice rockets and alternate warhead rockets.
69% of the work will be done in Grand Prairie, TX while the remaining 31% will be carried out in Camden, AR. Contract work is expected to be complete by Jun 2, 2017 and the contracting activity is Army Contracting Command, Redstone Arsenal – Missile, Redstone Arsenal, AL.
President Barack Obama’s proposed budget allocates $9.6 billion for missile defense in fiscal 2016. The FY16 budget proposal, which puts emphasis on missile defense, space systems, cyber security, Intelligence Surveillance Reconnaissance (“ISR”), advanced sensors, communications and munitions, has encouraged Lockheed Martin to focus more on its non-core defense segments. This shift will in focus will serve the company well over the long term.
Lockheed Martin enjoys a steady stream of contracts from the U.S. Department of Defense, even in this tepid budget scenario. Recently, the company won a $735.5 million contract for the maintenance and operation of several communication satellites belonging to the U.S. military. Although the company’s MFC segment witnessed a drop in sales by 19% in the first-quarter of 2015, its diverse portfolio allows it to secure plenty of contracts both in the domestic and international markets.
Lockheed Martin currently has a Zacks Rank #3 (Hold). Other favorably placed stocks in the same space are Leidos Holdings, Inc. LDOS, Northrop Grumman Corporation NOC and Raytheon Company RTN all carrying a Zacks Rank #2 (Buy).
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