Yahoo Finance Lockheed (LMT) Wins $2.3B Contract to Build GeoXO Spacecraft
Lockheed Martin Corp. LMT recently announced that it clinched a contract worth $2.27 billion to design and construct a spacecraft for the Geostationary Extended Observations (GeoXO) satellite program. The spacecraft will be delivered to the National Oceanic and Atmospheric Administration (“NOAA”).
Details of the Deal
Per the terms of the deal awarded by NASA, Lockheed will build three spacecraft, with the option of constructing additional spacecraft. The work related to this contract will be carried out in Lockheed Martin’s facility in Littleton and NASA’s Kennedy Space Center in Florida.
Under the agreement, Lockheed will also design, analyze, develop, fabricate, integrate, test, evaluate and support the launch of GeoXO satellites. LMT will further offer engineering development units, supply and maintain the ground support equipment and simulators and support mission operations at the NOAA Satellite Operations Facility in Suitland, MD. The first launch of the first GeoXO spacecraft is expected in the early 2030s.
What’s Favoring Lockheed?
Since diverse industries across the board are utilizing GEO satellites in multiple applications nowadays, like agriculture, transportation, disaster management and climate research, in addition to their conventional usage in defense and space industries, we are lately witnessing a solid growth trend in demand for technologically advanced GEO satellites. In particular, the growing demand for precise and timely weather information is in vogue as adverse weather conditions are being observed more frequently over the past decade due to climate change.
This must have prompted the Mordor Intelligence firm to expect the GEO Satellite market to witness a CAGR of 3.7% over the 2024-2029 period. Such a solid growth opportunity offered by the global GEO Satellite market should bode well for LMT.
Lockheed Martin works together with NASA, NOAA and other government organizations to provide cutting-edge satellite solutions for missions involving Earth observation. Impressively, Its GeoXO satellite will provide advanced Earth observations from the geostationary orbit by offering new observations of oceans and air pollution. This way, this satellite is expected to deliver more accurate weather forecasting, thereby offering improved safeguards to the United States against emerging environmental threats.
In addition to the GeoXO satellite, Lockheed Martin offers a broader variety of GEO satellites in its product line. The company has built more than 120 weather and environmental spacecraft for the U.S. government over the past 50 years.
LMT’s GOES-R satellite series provides vital atmospheric, hydrologic, oceanic, climatic, solar and space data, significantly improving the identification and monitoring of environmental events. Given the growth of the GEO satellite market, LMT's recent contract win is indicative of the high demand the company enjoys in this industry and suggests that there may be more such order flows in the near future.
Peer Moves
Apart from Lockheed Martin, the growing GEO satellite market also provides growth opportunities to other aerospace players like Boeing BA, Northrop Grumman Corp. NOC and Airbus Group EADSY, which hold a strong presence in this space.
Over the years, Boeing has produced many noteworthy GEO (Geostationary Earth Orbit) satellite products that have served a variety of government, broadcasting and communication purposes. Its flagship model, 702 series GEO satellites, can operate in the geosynchronous, medium-Earth or low-Earth orbital planes.
Boeing has a long-term (three to five years) earnings growth rate of 25.5%. The stock boasts a four-quarter average earnings surprise of 17.83%.
Northrop Grumman's experience in satellite systems and payloads has helped build sophisticated weather monitoring capabilities. The company-built JPSS-2 satellite provides meteorological data and observations to enhance the prediction and preparation for extreme weather conditions and observe long-term climate trends.
Northrop Grumman boasts a long-term earnings growth rate of 8.7%. The Zacks Consensus Estimate for NOC’s 2024 sales implies an improvement of 4.6% from the prior-year reported figure.
Airbus has delivered more than 110 geo satellites to over 60 nations worldwide to date. Its MetOp-SG twins A and B satellites are designed to enhance environmental research, climate monitoring and worldwide weather forecasting.
Airbus’ long-term earnings growth rate is pegged at 17.9%. The Zacks Consensus Estimate for EADSY’s 2024 sales calls for an improvement of 8.2% from the prior-year reported figure.
Price Movement
In the past six months, shares of Lockheed Martin have risen 4.7% against the industry’s decline of 11.7%.
Image Source: Zacks Investment Research
Zacks Rank
Lockheed Martin currently carries 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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