Yahoo Finance Lockheed (LMT) Wins $120M Deal to Support F-35 Jet Program
Lockheed Martin Corp.’s LMT business segment, Aeronautics, recently clinched a modification contract involving F-35 fighter jets. The award has been provided by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $120.3 million, the contract is projected to be completed by March 2024. Under the latest modification, Lockheed has the option to offer continued engineering, maintenance, logistics and material support for the F-35 Joint Strike Fighter aircraft.
The aforementioned efforts are aimed to aid development, production and sustainment of software builds, as well as to execute developmental flight tests for F-35 jets. The contract will serve the U.S. Air Force, Marine Corps, Navy, and Foreign Military Sales (FMS) and non-U.S. Department of Defense (DOD) partners.
Majority of the work related to this deal will be executed in Fort Worth, TX.
Importance of F-35 for LMT
Lockheed Martin enjoys a dominant position in the global military aircraft space with its F-35 fleet. The stealth aircraft boasts features that make it an ideal choice for many nations. The company’s constant efforts to modernize and upgrade the aircraft using advanced technologies to meet current warfare needs boost demand significantly.
The F-35 program remained the largest revenue generator for the Aeronautics business unit and accounted for 66% of the segment’s net sales in 2022.
Lockheed Martin has delivered 894 F-35 airplanes since the program's inception, with 345 jets in the backlog till December 2022. This, along with the latest contract win, boosts sales expectations for the aforementioned business segment.
LMT expects to deliver 147-153 jets per year in 2023 and 2024, and 156 jets in 2025 and beyond. This should bolster the company’s revenues significantly from the military aircraft field.
Growth Prospects
Per Mordor Intelligence projections, the global military aircraft market is expected to witness a CAGR of more than 4% during 2022-2031. Such projections indicate immense opportunities for Lockheed Martin to reap the benefits of the abovementioned market’s expansion.
Other prominent defense majors involved in the manufacturing of military aircraft are Northrop Grumman NOC, Airbus Group EADSY and Textron TXT, which are also expected to gain from the global military aircraft market’s growth opportunities.
Since its inception, Northrop Grumman has been a pioneer in the development of manned aircraft. From fighter jets and stealth bombers to surveillance and electronic warfare, it has been providing manned solutions to customers worldwide. The company has built some of the world’s most advanced aircraft, ranging from the innovative B-2 Spirit stealth bomber to the game-changing E-2D Advanced Hawkeye.
Its Aeronautics Systems unit is engaged in the design, development, production, integration, sustainment and modernization of advanced aircraft systems. The Mission Systems segment offers advanced mission solutions and multifunction systems like Airborne Early Warning & Control, LONGBOW Fire Control Radar and Scalable Agile Beam Radar.
Airbus Group’s military aircraft consists of the A400M, the C295 tactical transporter, the new-generation A330 Multi Role Tanker Transport and the Eurofighter, the most advanced swing-role fighter ever conceived.
The company has been providing its aircraft customers with an extended portfolio of services for more than 40 years, ranging from the training of flight and ground staff to live firing exercises anywhere around the world.
Textron’s military aircraft includes the Beechcraft T-6 training aircraft and the Beechcraft AT-6 light attack aircraft. The company also manufactures the Beechcraft Model 18 light bomber, the T-44 and T-34 training aircraft, and the T-1A jet trainer.
Its subsidiary, Able Aerospace Services, provides component and maintenance, repair and overhaul services for commercial and military fixed- and rotor-wing aircraft.
Price Movement
Shares of Lockheed have gained 7.5% in the past 12 months against the industry’s 7.7% decline.
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Zacks Rank
Lockheed currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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