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Lockheed Martin (LMT) Secures $42M Contract for TB-37 MFTA
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Lockheed Martin Corp.'s (LMT - Free Report) business unit, Mission Systems and Training, has won a modification contract to implement options for manufacturing of TB-37 Multi-Function Towed Array (MFTA) production units, accessories, shipping products, and offering engineering services.
Contract Details
The contract is valued at $42 million and has been awarded by the Naval Sea Systems Command, Washington, D.C.
Per the terms, the contract covers 56% of the purchases for the Navy and 44% for foreign military sales to Japan.
The work is scheduled to be completed by Sep 2019. Majority of the work will be executed in Liverpool, NY, while the rest will be carried out in Millersville, MD and Marion, MA. The contract will use fiscal 2017 other procurement (Navy) and foreign military sales funds.
TB-37 Attributes
The TB-37 is a next generation passive and active sonar receiver that is configured as a long 3-inch-diameter array to facilitate towing from behind surface ships. It is used for Arleigh Burke-class destroyers, Ticonderoga-class cruisers, the Littoral Combat Ship and Zumwalt-class land-attack destroyer.
Additionally, it helps surface warships to detect, pinpoint and attack enemy submarines. In fact, this sonar system can remain silent and simply listen to the sounds of enemy submarines, or it can ping active to bounce sound off the hulls of submarines in the area.
Our View
Lockheed Martin is the largest U.S. defense contractor with a platform-centric focus that guarantees a steady inflow of follow-on orders from a leveraged presence in the Army, Air Force, Navy and IT programs. Recently, the company’s Aeronautics business segment won a modification contract worth $137.8 million from the U.S. Navy. Per the contract, the defense giant will provide additional funding for affordability-based cost-reduction initiatives in support of low-rate initial production of the 9th lot of F-35 Lightening II Joint Strike Fighter.
Moreover, its business segment, Mission and Fire Control (MFC) secured a modification contract to provide system support for the Terminal High Altitude Area Defense (THAAD) field support contract (TFSC). The contract is valued at $112 million.
Price Movement
Lockheed Martin’s stock has been up about 17.7% in the last one year, underperforming the Zacks categorized Aerospace/Defense industry’s gain of 25.9%. This could be because the earlier budget cuts have put pressure on the top line although the present defense budget is more in favor of the sector. We believe that budget deficits and political uncertainty might make future defense budgets vulnerable to cutbacks. As a result, Lockheed Martin’s performance lagged behind the likes of General Dynamics Corp. (GD - Free Report) , The Boeing Co. (BA - Free Report) and Huntington Ingalls Industries, Inc. (HII - Free Report) who outperformed the industry.
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Lockheed Martin (LMT) Secures $42M Contract for TB-37 MFTA
Lockheed Martin Corp.'s (LMT - Free Report) business unit, Mission Systems and Training, has won a modification contract to implement options for manufacturing of TB-37 Multi-Function Towed Array (MFTA) production units, accessories, shipping products, and offering engineering services.
Contract Details
The contract is valued at $42 million and has been awarded by the Naval Sea Systems Command, Washington, D.C.
Per the terms, the contract covers 56% of the purchases for the Navy and 44% for foreign military sales to Japan.
The work is scheduled to be completed by Sep 2019. Majority of the work will be executed in Liverpool, NY, while the rest will be carried out in Millersville, MD and Marion, MA. The contract will use fiscal 2017 other procurement (Navy) and foreign military sales funds.
TB-37 Attributes
The TB-37 is a next generation passive and active sonar receiver that is configured as a long 3-inch-diameter array to facilitate towing from behind surface ships. It is used for Arleigh Burke-class destroyers, Ticonderoga-class cruisers, the Littoral Combat Ship and Zumwalt-class land-attack destroyer.
Additionally, it helps surface warships to detect, pinpoint and attack enemy submarines. In fact, this sonar system can remain silent and simply listen to the sounds of enemy submarines, or it can ping active to bounce sound off the hulls of submarines in the area.
Our View
Lockheed Martin is the largest U.S. defense contractor with a platform-centric focus that guarantees a steady inflow of follow-on orders from a leveraged presence in the Army, Air Force, Navy and IT programs. Recently, the company’s Aeronautics business segment won a modification contract worth $137.8 million from the U.S. Navy. Per the contract, the defense giant will provide additional funding for affordability-based cost-reduction initiatives in support of low-rate initial production of the 9th lot of F-35 Lightening II Joint Strike Fighter.
Moreover, its business segment, Mission and Fire Control (MFC) secured a modification contract to provide system support for the Terminal High Altitude Area Defense (THAAD) field support contract (TFSC). The contract is valued at $112 million.
Price Movement
Lockheed Martin’s stock has been up about 17.7% in the last one year, underperforming the Zacks categorized Aerospace/Defense industry’s gain of 25.9%. This could be because the earlier budget cuts have put pressure on the top line although the present defense budget is more in favor of the sector. We believe that budget deficits and political uncertainty might make future defense budgets vulnerable to cutbacks. As a result, Lockheed Martin’s performance lagged behind the likes of General Dynamics Corp. (GD - Free Report) , The Boeing Co. (BA - Free Report) and Huntington Ingalls Industries, Inc. (HII - Free Report) who outperformed the industry.
Zacks Rank
Lockheed Martin currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>