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Lockheed (LMT) Wins $186M Deal to Support CH-53K Aircraft
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Lockheed Martin Corp.’s (LMT - Free Report) business unit, Sikorsky, recently clinched a modification contract involving CH-53K Heavy Lift Aircraft. The Naval Air Systems Command, Patuxent River, MD, has offered the award.
Details of the Deal
Valued at $185.7 million, the contract is expected to get completed by December 2025. Per the terms of the deal, this latest modification will require Lockheed to procure and deliver two unfunded priority list CH-53K Heavy Lift jets, under low-rate initial production.
A major portion of the work related to this deal will be executed in Stratford, CA.
Importance of CH-53K Helicopter
The CH-53K helicopter specializes in heavy lifting and movement of troops and equipment from ship to shore and higher altitude terrains rapidly for expeditionary U.S. Marine Corps and international military missions. It also supports missions like humanitarian aid, troop transport, casualty evacuation, support of special operations forces, and combat search and rescue.
Benefits of the Contract
Countries globally have been reinforcing their military resources due to intense geopolitical tensions and amplified terrorist threats.
Among other combat arsenals and weaponries, military helicopters have also been gaining importance owing to advancements and the integration of new tactical and logistical features. This has provided ample opportunities for
Lockheed Martin to win production and modification contracts for helicopters in recent times, including the latest contract.
Such contract wins are likely to drive revenues from the Rotary and Mission Systems business segment, which comprises the Sikorsky helicopters. Prospects
The United States, which is the largest exporter of military weaponries worldwide, is also strengthening military resources. This is quite evident from the fiscal 2023 budget proposal worth $773 billion put forward by the Biden administration for the Department of Defense, with $56.5 billion planned investments in combat aircraft. Impressively, the defense budget request reflects a 4.1% increase from the fiscal 2022 enacted amount.
Such solid budgetary provisions should benefit Lockheed along with other defense manufacturers like Northrop Grumman (NOC - Free Report) , Boeing (BA - Free Report) and Textron (TXT - Free Report) , which also have expertise in manufacturing military aircraft.
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. It also enables warfighters to accomplish missions under any conditions.
NOC stock boasts a long-term earnings growth rate of 6.1%. The Zacks Consensus Estimate for 2022 sales implies growth of 2.7% from the 2021 reported figure.
Boeing Defense, Space & Security segment’s primary products include fixed-wing military aircraft, F/A-18E/F Super Hornet, F-15 programs, P-8 programs, KC-46A Tanker, and T-7A Red Hawk. This segment also produces rotorcraft and rotary-wing programs such as CH-47 Chinook, AH-64 Apache and V-22 Osprey.
BA stock boasts a long-term earnings growth rate of 4%. The Zacks Consensus Estimate for 2022 sales implies growth of 21.8% from the 2021 reported figure.
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.
TXT stock boasts a long-term earnings growth rate of 12.7%. The Zacks Consensus Estimate for 2022 sales implies growth of 8.2% from the 2021 reported figure.
Price Movement
In the past year, shares of Lockheed have gained 13.4% against the industry’s 41.6% decline.
Image: Shutterstock
Lockheed (LMT) Wins $186M Deal to Support CH-53K Aircraft
Lockheed Martin Corp.’s (LMT - Free Report) business unit, Sikorsky, recently clinched a modification contract involving CH-53K Heavy Lift Aircraft. The Naval Air Systems Command, Patuxent River, MD, has offered the award.
Details of the Deal
Valued at $185.7 million, the contract is expected to get completed by December 2025. Per the terms of the deal, this latest modification will require Lockheed to procure and deliver two unfunded priority list CH-53K Heavy Lift jets, under low-rate initial production.
A major portion of the work related to this deal will be executed in Stratford, CA.
Importance of CH-53K Helicopter
The CH-53K helicopter specializes in heavy lifting and movement of troops and equipment from ship to shore and higher altitude terrains rapidly for expeditionary U.S. Marine Corps and international military missions. It also supports missions like humanitarian aid, troop transport, casualty evacuation, support of special operations forces, and combat search and rescue.
Benefits of the Contract
Countries globally have been reinforcing their military resources due to intense geopolitical tensions and amplified terrorist threats.
Among other combat arsenals and weaponries, military helicopters have also been gaining importance owing to advancements and the integration of new tactical and logistical features. This has provided ample opportunities for
Lockheed Martin to win production and modification contracts for helicopters in recent times, including the latest contract.
Such contract wins are likely to drive revenues from the Rotary and Mission Systems business segment, which comprises the Sikorsky helicopters.
Prospects
The United States, which is the largest exporter of military weaponries worldwide, is also strengthening military resources. This is quite evident from the fiscal 2023 budget proposal worth $773 billion put forward by the Biden administration for the Department of Defense, with $56.5 billion planned investments in combat aircraft. Impressively, the defense budget request reflects a 4.1% increase from the fiscal 2022 enacted amount.
Such solid budgetary provisions should benefit Lockheed along with other defense manufacturers like Northrop Grumman (NOC - Free Report) , Boeing (BA - Free Report) and Textron (TXT - Free Report) , which also have expertise in manufacturing military aircraft.
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. It also enables warfighters to accomplish missions under any conditions.
NOC stock boasts a long-term earnings growth rate of 6.1%. The Zacks Consensus Estimate for 2022 sales implies growth of 2.7% from the 2021 reported figure.
Boeing Defense, Space & Security segment’s primary products include fixed-wing military aircraft, F/A-18E/F Super Hornet, F-15 programs, P-8 programs, KC-46A Tanker, and T-7A Red Hawk. This segment also produces rotorcraft and rotary-wing programs such as CH-47 Chinook, AH-64 Apache and V-22 Osprey.
BA stock boasts a long-term earnings growth rate of 4%. The Zacks Consensus Estimate for 2022 sales implies growth of 21.8% from the 2021 reported figure.
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.
TXT stock boasts a long-term earnings growth rate of 12.7%. The Zacks Consensus Estimate for 2022 sales implies growth of 8.2% from the 2021 reported figure.
Price Movement
In the past year, shares of Lockheed have gained 13.4% against the industry’s 41.6% decline.
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.