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Lockheed Martin (LMT) Wins $25M Army Deal for PATRIOT System
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Lockheed Martin Corp. (LMT - Free Report) has won a modification foreign military sales (“FMS”) contract from the U.S. Army to redesign Phased Array Tracking Radar Intercept on Target (PATRIOT), PATRIOT Advanced Capability-3 (PAC-3) and Missile Segment Enhancement (MSE) Aft Block I.
Contract Details
The contract is valued at $25.4 million and was awarded by the U.S. Army Contracting Command, Redstone Arsenal, AL.
The work is scheduled to be completed by May 15, 2020 and will be executed in Grand Prairie and Lufkin, TX. The contract will use fiscal 2017 other funds.
A Brief Note on PATRIOT
PATRIOT is a long-range, high-altitude, all-weather anti-missile system designed to counter threats from tactical ballistic missiles, cruise missiles and advanced fighter aircraft. This missile defense system was successfully used during the 1991 Gulf War and Iraqi War.
The popular Patriot missiles are made by Raytheon Company . This company has consistently focused on upgrading this missile defense system in order to keep pace with the changing dynamics of modern warfare.
The PAC-3 missile is a high-velocity interceptor that counters incoming targets by direct body-to-body impact. It uses a solid propellant rocket motor, aerodynamic controls, attitude control motors and inertial guidance to navigate. Moreover, according to Lockheed Martin, the PAC-3 MSE missile employs a two-pulse solid rocket motor that boosts altitude and range to meet growing threats.
Moving ahead, Lockheed Martin believes that growing interest in including a 360-degree active electronically scanned array radar to the Patriot Air Defense systems would lead to sales growth.
Like the U.S. and its allies, other nations across the globe are utilizing advanced technology to strengthen their defense systems. The aforementioned missiles are currently used by six nations — the U.S., Germany, Japan, Netherlands, United Arab Emirates and Taiwan. Apart from the countries listed under the latest contract, Lockheed Martin has a contract with Kuwait for these missiles.
What's Favoring Lockheed Martin?
Lockheed Martin manufactures combat-proven PAC-3 interceptor under production contracts from the U.S. Army, Air and Missile Defense Program. This enables the company to enjoy a steady stream of contracts.
It is the largest U.S. defense contractor with a platform-centric focus that guarantees a regular inflow of follow-on orders from a leveraged presence in the U.S. Army, Air Force, Navy and IT programs.
Lockheed Martin continues to witness robust demand in the international market for its programs. In particular, the Asia-Pacific and Middle Eastern countries comprise its biggest market for Missile Defense.
The latest contract is expected to boost the company's international business substantially and may even attract more of such contracts in the future, given that PAC-3 is one of the top priorities in the Pentagon's missile system.
Price Movement
Lockheed Martin’s stock has gained about 12.1% over the last one year, underperforming the Zacks categorized Aerospace/Defense industry’s gain of 19.9%. 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. Furthermore, the stock’s performance lags that of General Dynamics Corp. (GD - Free Report) and Huntington Ingalls Industries, Inc. (HII - Free Report) , which surpassed the industry mark.
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Lockheed Martin (LMT) Wins $25M Army Deal for PATRIOT System
Lockheed Martin Corp. (LMT - Free Report) has won a modification foreign military sales (“FMS”) contract from the U.S. Army to redesign Phased Array Tracking Radar Intercept on Target (PATRIOT), PATRIOT Advanced Capability-3 (PAC-3) and Missile Segment Enhancement (MSE) Aft Block I.
Contract Details
The contract is valued at $25.4 million and was awarded by the U.S. Army Contracting Command, Redstone Arsenal, AL.
The work is scheduled to be completed by May 15, 2020 and will be executed in Grand Prairie and Lufkin, TX. The contract will use fiscal 2017 other funds.
A Brief Note on PATRIOT
PATRIOT is a long-range, high-altitude, all-weather anti-missile system designed to counter threats from tactical ballistic missiles, cruise missiles and advanced fighter aircraft. This missile defense system was successfully used during the 1991 Gulf War and Iraqi War.
The popular Patriot missiles are made by Raytheon Company . This company has consistently focused on upgrading this missile defense system in order to keep pace with the changing dynamics of modern warfare.
The PAC-3 missile is a high-velocity interceptor that counters incoming targets by direct body-to-body impact. It uses a solid propellant rocket motor, aerodynamic controls, attitude control motors and inertial guidance to navigate. Moreover, according to Lockheed Martin, the PAC-3 MSE missile employs a two-pulse solid rocket motor that boosts altitude and range to meet growing threats.
Moving ahead, Lockheed Martin believes that growing interest in including a 360-degree active electronically scanned array radar to the Patriot Air Defense systems would lead to sales growth.
Like the U.S. and its allies, other nations across the globe are utilizing advanced technology to strengthen their defense systems. The aforementioned missiles are currently used by six nations — the U.S., Germany, Japan, Netherlands, United Arab Emirates and Taiwan. Apart from the countries listed under the latest contract, Lockheed Martin has a contract with Kuwait for these missiles.
What's Favoring Lockheed Martin?
Lockheed Martin manufactures combat-proven PAC-3 interceptor under production contracts from the U.S. Army, Air and Missile Defense Program. This enables the company to enjoy a steady stream of contracts.
It is the largest U.S. defense contractor with a platform-centric focus that guarantees a regular inflow of follow-on orders from a leveraged presence in the U.S. Army, Air Force, Navy and IT programs.
Lockheed Martin continues to witness robust demand in the international market for its programs. In particular, the Asia-Pacific and Middle Eastern countries comprise its biggest market for Missile Defense.
The latest contract is expected to boost the company's international business substantially and may even attract more of such contracts in the future, given that PAC-3 is one of the top priorities in the Pentagon's missile system.
Price Movement
Lockheed Martin’s stock has gained about 12.1% over the last one year, underperforming the Zacks categorized Aerospace/Defense industry’s gain of 19.9%. 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. Furthermore, the stock’s performance lags that of General Dynamics Corp. (GD - Free Report) and Huntington Ingalls Industries, Inc. (HII - Free Report) , which surpassed the industry mark.
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.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>