Yahoo Finance Lockheed Martin (LMT) Wins $79M Deal to Support LCS Program
Lockheed Martin Corp.’s LMT Rotary and Mission Systems (RMS) business division recently secured a $78.5-million modification contract to execute the class design services for the Littoral Combat Ship (LCS) program. The contract was awarded by the Naval Sea Systems Command, Washington, D.C.
Work related to the deal will be conducted in Hampton, VA; Moorestown, NJ; Washington, D.C. and Marinette, WI, and is expected to be completed by October 2021.
Littoral Combat Ship’s Specialties
The LCS is a fast, highly maneuverable, networked surface combat ship, which is a specialized variant of the family of U.S. future surface combat ships, known as DD(X). The LCS is equipped to operate in the coastal waters and can counter growing potential threats from coastal mines, quiet diesel submarines and others. The LCS can serve surface, anti-submarine and mine countermeasure missions.
What Favors Lockheed Martin?
The fiscal 2021 defense budget provisions for a spending plan of $32.3 billion for shipbuilding. Such solid budgetary allocations should enable Lockheed Martin in the future to procure more significant contracts related to combat ships, like the latest one.
Looking ahead, per Technavio, the global naval shipbuilding market is expected to witness a CAGR of 3% over the 2020-2024 period to reach $14.36 billion. This, in turn, should potentially boost the demand for various assault ships, including the LCS combat ships. Such projections are expected to benefit Lockheed Martin, going forward.
Other Defense Majors to Benefit
In line with the aforementioned favorable market projections, major defense players, especially those which manufacture warships, like Huntington Ingalls HII General Dynamics GD and Bae Systems PLC BAESY, should also benefit, going ahead.
Huntington Ingalls is already known to specialize in manufacturing amphibious assault and expeditionary ships and provide more than 70% of ships to the U.S. Navy. Likewise, General Dynamics' National Steel and Shipbuilding Company (NASSCO) has an extensive history of designing, building and repairing ships for the U.S. government and commercial customers.
Bae Systems PLC is also poised to benefit as it specializes in providing maintenance and modernization programs to support ships and equipment in service, across the globe.
Zacks Rank & Price Performance
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.
In the past six-month period, Lockheed Martin’s shares have gained 4.2% compared with the industry’s 1.2% growth.
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