Defense contractor Lockheed Martin Corporation (LMT) yesterday added to its order book an $85 million U.S. Navy contract.
Under the contract, Lockheed will provide operations and maintenance support to five U.S. Navy ocean surveillance ships. The contract that forms a part of the Navy’s antisubmarine warfare mission is a lucrative one-year contract, extendable up to 4 years through yearly options.
The antisubmarine warfare mission is of great significance to the Navy. Lockheed Martin will use the Surveillance Towed Array Sensor System program to provide sustainment and logistics management for all installed antisubmarine warfare mission systems, including passive and active surveillance equipment and computer network systems.
These equipments form an important part of the mission as they render services whenever and wherever these ships may be.
Operated by the Navy's Military Sealift Command, the ships and their crews conduct training and missions worldwide. Maintenance is primarily performed at Commander Fleet Activities Sasebo, Japan. Other locations include the United Kingdom and Virginia Beach, Virginia.
Based in Bethesda, Maryland, Lockheed Martin is a global security company principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. The company’s major customers include the U.S. government, foreign governments, and other commercial buyers. The company employs about 133,000 people worldwide.
Lockheed Martin is scheduled to release its second quarter 2011 results on July 26, 2011. Lockheed expects its fiscal 2011 earnings to come in at $6.95 – $7.25 with revenues in the range of $45.8 billion-$47.3 billion. The Zacks Consensus earnings estimates for the second quarter, fiscal 2011 and fiscal 2012 are $1.94, $7.30 and $8.72, respectively.
Currently, Lockheed Martin has a Zacks #3 Rank, which implies a short-term ‘Hold’ rating. We maintain our ‘Neutral’ rating on a long-term basis (6-12 months) on the defense behemoth. In the near term the stock is expected to perform in line with the market. The company competes primarily with The Boeing Company (BA) and Northrop Grumman Corporation (NOC).
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