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Lockheed (LMT) Wins Contract to Support CH-53K Helicopters
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Lockheed Martin Corp.’s (LMT - Free Report) business unit, Sikorsky, secured a modification contract involving CH-53K helicopters. The deal has been awarded by the Naval Air Warfare Center Training Systems Division, Orlando, FL.
Details of the Deal
Valued at $21.8 million, the contract is expected to be completed by September 2025.
Per the terms of the deal, Lockheed will procure one containerized flight training device for CH53K helicopters. It will also deliver associated technical data based on low-rate initial production to support CH-53K Phase II training system efforts.
Majority of the work related to this deal will be carried out in Chantilly, VA.
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 been gaining importance owing to advancements and integration of new tactical and logistical features. This has provided ample opportunities for Lockheed to win production and modification contracts for helicopters in recent times. The latest contract win is a bright example of that.
Such contract wins are likely to drive revenues from the Rotary and Mission Systems business segment, which comprises of the Sikorsky helicopters.
Growth Prospects
The increased defense budget of many nations, as a repercussion of the Russian-Ukraine war, has resulted in a surge in demand for military arms and ammunitions of late. This may have led to increased defense spending on military helicopters as well.
Per a report from Mordor Intelligence, the military rotorcraft market is likely to witness a CAGR of more than 4% during 2022-2027.
The growth prospects of the military rotorcraft market should benefit Lockheed, along with other defense primes like Textron (TXT - Free Report) , Boeing (BA - Free Report) and Northrop Grumman (NOC - Free Report) , which have already established their position in the military helicopter arena.
Textron’s Bell unit provides advanced military helicopters, parts as well as support services to the U.S. government and military customers outside the United States. The unit’s primary U.S. government programs are meant for the production and support of the V-22 tiltrotor aircraft and H-1 helicopters.
TXT’s long-term earnings growth rate is 11.2%. The Zacks Consensus Estimate for its 2023 sales indicates an improvement of 7.2% from the 2022 reported figure.
Boeing’s portfolio of helicopters comprises of the AH-6 Little Bird, AH-64 Apache, V-22 Osprey and H-47 Chinook aircraft and in-development entrants, which include the MH-139A Grey Wolf and DEFIANT X. Its military rotorcraft is currently used by the U.S. Army, Navy, Marines and Air Force as well as allied defense forces in more than 20 countries across the globe.
BA’s long-term earnings growth rate is 4%. The Zacks Consensus Estimate for its 2023 sales indicates an improvement of 17.9% from the 2022 reported number.
Northrop Grumman’s Fire Scout is a combat-proven, autonomous helicopter system providing real-time intelligence, surveillance, reconnaissance and target-acquisition, laser designation and battle management for tactical users without relying on manned aircraft or space-based assets. It has two variants — MQ-8B Fire Scout and MQ-8C Fire Scout.
NOC has a long-term earnings growth rate of 3.8%. The Zacks Consensus Estimate for its 2023 sales implies growth of 4.7% from the previous year’s reported actual.
Price Movement
Shares of Lockheed have rallied 11.2% in the past 12 months against the industry’s 0.4% decline.
Image: Shutterstock
Lockheed (LMT) Wins Contract to Support CH-53K Helicopters
Lockheed Martin Corp.’s (LMT - Free Report) business unit, Sikorsky, secured a modification contract involving CH-53K helicopters. The deal has been awarded by the Naval Air Warfare Center Training Systems Division, Orlando, FL.
Details of the Deal
Valued at $21.8 million, the contract is expected to be completed by September 2025.
Per the terms of the deal, Lockheed will procure one containerized flight training device for CH53K helicopters. It will also deliver associated technical data based on low-rate initial production to support CH-53K Phase II training system efforts.
Majority of the work related to this deal will be carried out in Chantilly, VA.
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 been gaining importance owing to advancements and integration of new tactical and logistical features. This has provided ample opportunities for Lockheed to win production and modification contracts for helicopters in recent times. The latest contract win is a bright example of that.
Such contract wins are likely to drive revenues from the Rotary and Mission Systems business segment, which comprises of the Sikorsky helicopters.
Growth Prospects
The increased defense budget of many nations, as a repercussion of the Russian-Ukraine war, has resulted in a surge in demand for military arms and ammunitions of late. This may have led to increased defense spending on military helicopters as well.
Per a report from Mordor Intelligence, the military rotorcraft market is likely to witness a CAGR of more than 4% during 2022-2027.
The growth prospects of the military rotorcraft market should benefit Lockheed, along with other defense primes like Textron (TXT - Free Report) , Boeing (BA - Free Report) and Northrop Grumman (NOC - Free Report) , which have already established their position in the military helicopter arena.
Textron’s Bell unit provides advanced military helicopters, parts as well as support services to the U.S. government and military customers outside the United States. The unit’s primary U.S. government programs are meant for the production and support of the V-22 tiltrotor aircraft and H-1 helicopters.
TXT’s long-term earnings growth rate is 11.2%. The Zacks Consensus Estimate for its 2023 sales indicates an improvement of 7.2% from the 2022 reported figure.
Boeing’s portfolio of helicopters comprises of the AH-6 Little Bird, AH-64 Apache, V-22 Osprey and H-47 Chinook aircraft and in-development entrants, which include the MH-139A Grey Wolf and DEFIANT X. Its military rotorcraft is currently used by the U.S. Army, Navy, Marines and Air Force as well as allied defense forces in more than 20 countries across the globe.
BA’s long-term earnings growth rate is 4%. The Zacks Consensus Estimate for its 2023 sales indicates an improvement of 17.9% from the 2022 reported number.
Northrop Grumman’s Fire Scout is a combat-proven, autonomous helicopter system providing real-time intelligence, surveillance, reconnaissance and target-acquisition, laser designation and battle management for tactical users without relying on manned aircraft or space-based assets. It has two variants — MQ-8B Fire Scout and MQ-8C Fire Scout.
NOC has a long-term earnings growth rate of 3.8%. The Zacks Consensus Estimate for its 2023 sales implies growth of 4.7% from the previous year’s reported actual.
Price Movement
Shares of Lockheed have rallied 11.2% in the past 12 months against the industry’s 0.4% decline.
Image Source: Zacks Investment Research
Zacks Rank
Lockheed currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.