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Lockheed (LMT) Wins $77M Contract to Support F-16 Program
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Lockheed Martin Corp.’s (LMT - Free Report) business segment, Rotary and Mission Systems, recently secured a foreign military sales (FMS) contract involving the F-16 jet program. The award has been offered by the Air Force Life Cycle Management Center, Wright-Patterson Air Force Base, OH.
Details of the Deal
Valued at $77.6 million, the contract is estimated to be completed by Dec 14, 2027. Per the terms, Lockheed will offer engineering, manufacturing, and development, production, integration, testing and delivery of training devices for F-16 Block 70 training systems.
The jet giant will also supply spare parts and support equipment related to the F-16 program. Work related to this deal will be performed in two Eastern European FMS partner nations and one Middle Eastern FMS partner nation.
Importance of the F-16 Jets
Over the past decade, a rapid rise in global terrorism and adverse geopolitical situations across borders has boosted demand for defense products, with combat aircraft constituting a major portion of that portfolio. It is imperative to mention here that the F-16 Falcon jets have significantly grown in importance on a global scale over the past few years.
Over the past couple of years, the F-16 has witnessed significant development, with nations like Taiwan, Bulgaria, Morocco and Bahrain signing agreements to procure new F-16 aircraft. Due to its rising importance, Lockheed Martin introduced F-16 Block 70/72 in 2020, the most advanced F-16 aircraft, combining numerous capabilities and structural upgrades.
Such advancements might have been ushering in contracts from Pentagon and other U.S. allies, like the latest one, thus boosting Lockheed Martin’s revenue prospects.
Growth Prospects
With rising security threats across the globe, emerging economies like the Asia Pacific, the Middle East and South America are spending a lot on enhancing their defense arsenals. Meanwhile, developed nations like the United States and Europe have already been leading the defense market. With the United States being the largest weapons exporter worldwide, the nation has been spending significantly on defense products including combat aircraft.
Lockheed, being a prominent combat aircraft manufacturer in the United States, thus enjoys a dominant position in the combat aircraft market.
Looking ahead, per a Mordor Intelligence report, the global combat aircraft market is expected to witness a CAGR of 2.5% during the 2021-2026 time period, with North America constituting the largest share of this market. Such growth can be attributed to a rise in global threats and geopolitical instabilities, and increased spending on defense. These projections should benefit Lockheed along with other U.S.-based combat jet manufacturers like Boeing (BA - Free Report) , Northrop Grumman (NOC - Free Report) and Textron (TXT - Free Report) .
Boeing’s Defense, Space & Security segment engages in the research, development, production and modification of manned and unmanned military aircraft. This segment's primary products include military aircraft including F/A-18E/F Super Hornet, F-15, P-8, KC-46A Tanker, and T-7A Red Hawk aircraft.
Boeing’s third-quarter revenues amounted to $15,278 million, which improved 8% year over year. BA stock boasts a long-term earnings growth rate of 4%.
Since its inception, Northrop Grumman has been a pioneer in the development of manned aircraft for combat. Northrop Grumman also has a tradition of providing technological leadership in all aspects of military aviation and aircraft, such as manned, unmanned, targeting, surveillance, and aircraft self-protection systems that enable warfighters to accomplish missions anytime, anywhere and under any conditions.
Northrop Grumman reported third-quarter 2021 earnings of $6.63 per share, which surpassed the Zacks Consensus Estimate of $5.93 by 11.8%. NOC stock has gained 26% in the past year.
Textron’s business unit, Textron Aviation Defense designs, builds and supports versatile and globally known military aircraft preferred for training and attack missions. Some of Textron’s renowned products include Beechcraft T-6C trainer and AT-6 Wolverine.
Textron reported third-quarter 2021 adjusted earnings of 85 cents per share, which exceeded the Zacks Consensus Estimate of 75 cents by 13.3%. TXT stock has gained 59.9% in the past year.
Price Movement and Zacks Rank
Shares of Lockheed Martin have lost 2.4% in the past year compared with the industry's decline of 32.9%.
Image: Bigstock
Lockheed (LMT) Wins $77M Contract to Support F-16 Program
Lockheed Martin Corp.’s (LMT - Free Report) business segment, Rotary and Mission Systems, recently secured a foreign military sales (FMS) contract involving the F-16 jet program. The award has been offered by the Air Force Life Cycle Management Center, Wright-Patterson Air Force Base, OH.
Details of the Deal
Valued at $77.6 million, the contract is estimated to be completed by Dec 14, 2027. Per the terms, Lockheed will offer engineering, manufacturing, and development, production, integration, testing and delivery of training devices for F-16 Block 70 training systems.
The jet giant will also supply spare parts and support equipment related to the F-16 program. Work related to this deal will be performed in two Eastern European FMS partner nations and one Middle Eastern FMS partner nation.
Importance of the F-16 Jets
Over the past decade, a rapid rise in global terrorism and adverse geopolitical situations across borders has boosted demand for defense products, with combat aircraft constituting a major portion of that portfolio. It is imperative to mention here that the F-16 Falcon jets have significantly grown in importance on a global scale over the past few years.
Over the past couple of years, the F-16 has witnessed significant development, with nations like Taiwan, Bulgaria, Morocco and Bahrain signing agreements to procure new F-16 aircraft. Due to its rising importance, Lockheed Martin introduced F-16 Block 70/72 in 2020, the most advanced F-16 aircraft, combining numerous capabilities and structural upgrades.
Such advancements might have been ushering in contracts from Pentagon and other U.S. allies, like the latest one, thus boosting Lockheed Martin’s revenue prospects.
Growth Prospects
With rising security threats across the globe, emerging economies like the Asia Pacific, the Middle East and South America are spending a lot on enhancing their defense arsenals. Meanwhile, developed nations like the United States and Europe have already been leading the defense market. With the United States being the largest weapons exporter worldwide, the nation has been spending significantly on defense products including combat aircraft.
Lockheed, being a prominent combat aircraft manufacturer in the United States, thus enjoys a dominant position in the combat aircraft market.
Looking ahead, per a Mordor Intelligence report, the global combat aircraft market is expected to witness a CAGR of 2.5% during the 2021-2026 time period, with North America constituting the largest share of this market. Such growth can be attributed to a rise in global threats and geopolitical instabilities, and increased spending on defense. These projections should benefit Lockheed along with other U.S.-based combat jet manufacturers like Boeing (BA - Free Report) , Northrop Grumman (NOC - Free Report) and Textron (TXT - Free Report) .
Boeing’s Defense, Space & Security segment engages in the research, development, production and modification of manned and unmanned military aircraft. This segment's primary products include military aircraft including F/A-18E/F Super Hornet, F-15, P-8, KC-46A Tanker, and T-7A Red Hawk aircraft.
Boeing’s third-quarter revenues amounted to $15,278 million, which improved 8% year over year. BA stock boasts a long-term earnings growth rate of 4%.
Since its inception, Northrop Grumman has been a pioneer in the development of manned aircraft for combat. Northrop Grumman also has a tradition of providing technological leadership in all aspects of military aviation and aircraft, such as manned, unmanned, targeting, surveillance, and aircraft self-protection systems that enable warfighters to accomplish missions anytime, anywhere and under any conditions.
Northrop Grumman reported third-quarter 2021 earnings of $6.63 per share, which surpassed the Zacks Consensus Estimate of $5.93 by 11.8%. NOC stock has gained 26% in the past year.
Textron’s business unit, Textron Aviation Defense designs, builds and supports versatile and globally known military aircraft preferred for training and attack missions. Some of Textron’s renowned products include Beechcraft T-6C trainer and AT-6 Wolverine.
Textron reported third-quarter 2021 adjusted earnings of 85 cents per share, which exceeded the Zacks Consensus Estimate of 75 cents by 13.3%. TXT stock has gained 59.9% in the past year.
Price Movement and Zacks Rank
Shares of Lockheed Martin have lost 2.4% in the past year compared with the industry's decline of 32.9%.
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.