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Lockheed Martin (LMT) Secures Contract worth $67.3 Million

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Lockheed Martin Corporation (LMT - Free Report) has been awarded a replenishment spares and incidental services contract by the Air Force Life Cycle Management Center, Robins Air Force Base, GA. The contract is worth $67.3 million.

Details of the Contract

Per the deal, Lockheed Martin will provide support for the Sniper Advanced Targeting Pod system, the Low Altitude Navigation and Targeting Infrared for Night system, and the Infrared Search and Track system. It is part of foreign military sales (FMS) to the Kingdom of Saudi Arabia.

Work on the contract will be done in Orlando, FL, and is expected to be over by Mar 31, 2020.

International Foray by the Company

Lockheed Martin generated 21% of its total sales from international customers in 2015 (up from 19.4% in 2014), which includes FMS. The F-35 program has been a key catalyst for the company, having generated 20% of the total consolidated sales in 2015. Going forward, the company plans to increase the international mix from 21% of 2016 total sales to 25% in the upcoming years.

Notably, the company has recently raised this target to 30% for the next few years. Lately, Lockheed Martin has been witnessing strong demand for its equipment, ranging from C-130J aircraft in France and Germany to helicopters in Poland and missile defense systems in the Asia-Pacific, Europe, and Middle East regions. In addition to strong demand for its tactical aircraft, F-16 and the F-35 as well as mobility C-130J, the company’s THAAD, Aegis, Aegis Ashore, Patriot, and MEADS have been gaining significant traction.

Price Movement

Lockheed Martin has outperformed the Zacks Categorized Aerospace/Defense industry over the last 12 months. The company’s share price gained 21% during this time frame, compared to the industry’s 10.9%. Lockheed Martin surpassed earnings estimates in all four trailing quarters, resulting in an average positive surprise of 11.36%.

The primary reason for the outperformance is Lockheed Martin’s position as an industry bellweather with a portfolio covering all the prime areas and persistent growth in the Aeronautics, Missiles and Fire Control, and Mission Systems segments. In particular, the Aeronautics unit, which is responsible for production of the F-35, will continue to be the primary top-line driver, going forward.

Zacks Rank & Key Picks

Lockheed Martin carries a Zacks Rank #2 (Buy). Other favorably placed stocks in the same space include Engility Holdings, Inc. , Northrop Grumman Corporation (NOC - Free Report) and Leidos Holdings, Inc. (LDOS - Free Report) .

Engility Holdings has seen six upward estimate revisions for 2016 over the last 60 days. Its estimates increased from $1.42 30 days ago to $1.61 today, reflecting an upside of 13.4%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Northrop Grumman, another Zacks Rank #1 stock, has seen eight upward estimate revisions for 2016 over the last 60 days. Its estimates increased from $11.07 60 days ago to $11.74 today, reflecting an upside of 6%

Leidos Holdings has seen three upward estimate revisions for 2016 over the last 60 days. The stock carries a Zacks Rank #2 (Buy).Its estimates increased from $3.22 30 days ago to $3.56 today, reflecting an upside of 10.6%

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