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Lockheed (LMT) Wins $107M Deal to Aid ACURL F-35 Jet Program
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Lockheed Martin Corp.’s (LMT - Free Report) business segment, Aeronautics, recently secured a modification contract involving F-35 fighter jets. The award has been provided by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $107 million, the contract is projected to be completed by December 2029. Per the terms of the deal, Lockheed will offer engineering, test, maintenance, logistics and material support to aid Phase 2 upgrades of the Australia Canada United Kingdom Reprogramming Laboratory (ACURL) for the F-35 Joint Strike Fighter program.
This modification also provides scope to procure verification and validation system hardware, common system infrastructure hardware, ACURL Phase 2 follow on modernization design and training in support of ACURL Phase 2 efforts.
Majority of the work related to this contract will be executed in Elgin, FL.
Importance of F-35 for LMT
Lockheed Martin enjoys a dominant position in the global military aircraft space with its F-35 fleet. The stealth aircraft boasts features that make it an ideal choice for many nations. Moreover, LMT’s constant efforts to modernize and upgrade the aircraft with advanced technologies to meet current warfare needs boost demand significantly.
The F-35 program remained the largest revenue generator for its Aeronautics business unit and accounted for 66% of the Aeronautics segment’s net sales in 2022.
Lockheed Martin has delivered 894 F-35 airplanes since the program's inception, with 345 jets in backlog till December 2022. This, along with the latest contract win, boosts sales expectations for the Aeronautics business segment.
The company expects to deliver 147-153 jets per year in 2023 and 2024, and 156 in 2025 and beyond. This, in turn, should bolster LMT’s revenues significantly from the military aircraft field.
Growth Prospects
Per Mordor Intelligence projections, the global military aircraft market is expected to witness a CAGR of more than 4% during 2022-2031. Such projections indicate immense opportunities for the company to further reap the benefits of military aircraft market expansion.
Other prominent defense majors that are involved in the manufacturing of military aircraft are Northrop Grumman (NOC - Free Report) , Airbus Group (EADSY - Free Report) and Textron (TXT - Free Report) , which are also expected to gain from the aforementioned market’s growth opportunities.
Since its inception, Northrop Grumman has been a pioneer in the development of manned aircraft. From fighter jets and stealth bombers to surveillance and electronic warfare, Northrop Grumman has been providing manned solutions to customers worldwide. It has built some of the world’s most advanced aircraft, ranging from the innovative B-2 Spirit stealth bomber to the game-changing E-2D Advanced Hawkeye.
Its Aeronautics Systems unit is engaged in the design, development, production, integration, sustainment and modernization of advanced aircraft systems. Its Mission Systems segment, on the other hand, offers advanced mission solutions and multifunction systems like Airborne Early Warning & Control, LONGBOW Fire Control Radar and Scalable Agile Beam Radar.
Airbus Group’s military aircraft consists of the A400M, the C295 tactical transporter, the new-generation A330 Multi Role Tanker Transport and the Eurofighter, the most modern swing-role fighter ever conceived.
The company has also been providing its aircraft customers with an extended portfolio of services for over 40 years. Its services range from the training of flight and ground crews to live firing exercises anywhere around the world.
Textron’s military aircraft includes the Beechcraft T-6 training aircraft and the Beechcraft AT-6 light attack aircraft. The company also manufactures the Beechcraft Model 18 light bomber, the T-44 and T-34 training aircraft, and the T-1A jet trainer.
Its subsidiary, Able Aerospace Services, provides component and maintenance, repair and overhaul services in support of commercial and military fixed- and rotor-wing aircraft.
Price Movement
Shares of Lockheed have gained 7.4% in the past 12 months against the industry’s decline of 12.3%.
Image: Bigstock
Lockheed (LMT) Wins $107M Deal to Aid ACURL F-35 Jet Program
Lockheed Martin Corp.’s (LMT - Free Report) business segment, Aeronautics, recently secured a modification contract involving F-35 fighter jets. The award has been provided by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $107 million, the contract is projected to be completed by December 2029. Per the terms of the deal, Lockheed will offer engineering, test, maintenance, logistics and material support to aid Phase 2 upgrades of the Australia Canada United Kingdom Reprogramming Laboratory (ACURL) for the F-35 Joint Strike Fighter program.
This modification also provides scope to procure verification and validation system hardware, common system infrastructure hardware, ACURL Phase 2 follow on modernization design and training in support of ACURL Phase 2 efforts.
Majority of the work related to this contract will be executed in Elgin, FL.
Importance of F-35 for LMT
Lockheed Martin enjoys a dominant position in the global military aircraft space with its F-35 fleet. The stealth aircraft boasts features that make it an ideal choice for many nations. Moreover, LMT’s constant efforts to modernize and upgrade the aircraft with advanced technologies to meet current warfare needs boost demand significantly.
The F-35 program remained the largest revenue generator for its Aeronautics business unit and accounted for 66% of the Aeronautics segment’s net sales in 2022.
Lockheed Martin has delivered 894 F-35 airplanes since the program's inception, with 345 jets in backlog till December 2022. This, along with the latest contract win, boosts sales expectations for the Aeronautics business segment.
The company expects to deliver 147-153 jets per year in 2023 and 2024, and 156 in 2025 and beyond. This, in turn, should bolster LMT’s revenues significantly from the military aircraft field.
Growth Prospects
Per Mordor Intelligence projections, the global military aircraft market is expected to witness a CAGR of more than 4% during 2022-2031. Such projections indicate immense opportunities for the company to further reap the benefits of military aircraft market expansion.
Other prominent defense majors that are involved in the manufacturing of military aircraft are Northrop Grumman (NOC - Free Report) , Airbus Group (EADSY - Free Report) and Textron (TXT - Free Report) , which are also expected to gain from the aforementioned market’s growth opportunities.
Since its inception, Northrop Grumman has been a pioneer in the development of manned aircraft. From fighter jets and stealth bombers to surveillance and electronic warfare, Northrop Grumman has been providing manned solutions to customers worldwide. It has built some of the world’s most advanced aircraft, ranging from the innovative B-2 Spirit stealth bomber to the game-changing E-2D Advanced Hawkeye.
Its Aeronautics Systems unit is engaged in the design, development, production, integration, sustainment and modernization of advanced aircraft systems. Its Mission Systems segment, on the other hand, offers advanced mission solutions and multifunction systems like Airborne Early Warning & Control, LONGBOW Fire Control Radar and Scalable Agile Beam Radar.
Airbus Group’s military aircraft consists of the A400M, the C295 tactical transporter, the new-generation A330 Multi Role Tanker Transport and the Eurofighter, the most modern swing-role fighter ever conceived.
The company has also been providing its aircraft customers with an extended portfolio of services for over 40 years. Its services range from the training of flight and ground crews to live firing exercises anywhere around the world.
Textron’s military aircraft includes the Beechcraft T-6 training aircraft and the Beechcraft AT-6 light attack aircraft. The company also manufactures the Beechcraft Model 18 light bomber, the T-44 and T-34 training aircraft, and the T-1A jet trainer.
Its subsidiary, Able Aerospace Services, provides component and maintenance, repair and overhaul services in support of commercial and military fixed- and rotor-wing aircraft.
Price Movement
Shares of Lockheed have gained 7.4% in the past 12 months against the industry’s decline of 12.3%.
Image Source: Zacks Investment Research
Zacks Rank
Lockheed currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.