Weak performance on the bourses forced the Aerospace-Defense industry to remain under pressure in the last five trading sessions. While fresh missile brawl between North Korea and the U.S. heightened tension between these two nations, a not-so-impressive employment data for May disappointed many. In particular, North Korea fired multiple cruise missiles on Thursday morning, a day after Seoul suspended deployment of U.S. antimissile system. This seems to have dragged down the defense stocks.

As a result, major indices in this space went south in the trailing five trading sessions.  While the S&P 500 Aerospace & Defense (Industry) Index dipped 0.6%, the Dow Jones U.S. Aerospace & Defense Index slipped 0.2% during this period.

Nevertheless, a generous flow of funds from the Pentagon kept the industry on its feet. Among the last week’s highlights, defense majors, The Boeing Company (BA Quick QuoteBA - Free Report) , Textron Inc. (TXT Quick QuoteTXT - Free Report) , Lockheed Martin Corp. (LMT Quick QuoteLMT - Free Report) and General Dynamics Corp. (GD Quick QuoteGD - Free Report) secured a number of orders from the Department of Defense’s (“DoD”) daily funding session. Meanwhile, Boeing and Huntington Ingalls Industries (HII Quick QuoteHII - Free Report) announced a new partnership.

Recap of the Week’s Most Important Stories

1. Aerospace giant Boeing’s subsidiary, Insitu Inc. secured a contract worth $475 million to provide intelligence, surveillance and reconnaissance (ISR) services in support of the Mid-Endurance Unmanned Aircraft Systems (MEUAS) program, at multiple locations across the globe.

The contract was awarded by the U.S. Special Operations Command (USSOCOM), Tampa, FL. Work related to the deal is scheduled to be over by Jun 2022.

Insitu provides high-performance, low-cost UAS used for ISR. One of its well-known products is the long-endurance autonomous unmanned vehicle named ScanEagle. Apart from being used by the U.S. Navy and Marine Corps, ScanEagle has also been adopted by the First Marine Expeditionary Force in Iraq as well as the UK Ministry of Defence's Joint UAV Experimentation Programme (JUEP) (read more: Boeing's Unit Wins $475M Deal to Support MEUAS Program).

2. Diversified U.S. conglomerate Textron’s subsidiary, AAI Corp. won a contract worth $475 million from the USSOCOM for the MEUAS. Work is anticipated to be completed by Jun 2022.

Per the contract, AAI Corp. will provide services for MEUAS intelligence, surveillance and reconnaissance (ISR) at various locations worldwide. It covers both firm-fixed-price and cost-reimbursable line items.

Textron’s unmanned aircraft systems include Aerosonde Small Unmanned Aircraft System (SUAS) and Shadow family of products. AAI Corp.’s multi-mission-capable unmanned aircraft, along with interoperable command and control technologies, provide critical situational awareness and actionable intelligence for users globally (read more: Textron Unit Secures $475M Contract for MEUAS Services).

3. Defense giant General Dynamics’ National Steel and Shipbuilding Co. (NASSCO) clinched a contract worth $105.4 million for the execution of USS Makin Island (LHD 8) fiscal 2017 dry-docking phased maintenance availability. Work related to this deal will be carried out in San Diego, CA.

The contract was awarded by the Naval Sea Systems Command, Washington, DC. Moreover, the cumulative value of this contract can be up to $106 million, if the options included in this agreement are exercised.

Manufactured by Huntington, USS Makin Island is the eighth and final WASP-class Amphibious Assault Ship — the only ship in her class powered by LM 2500+ Gas Turbine Engines and Electric Drive. General Dynamics’ NASSCO offers the sole major ship-construction yard on the West Coast of the U.S. that is capable of maintaining or repairing any ocean-going vessel (read more: General Dynamics Wins $105M Deal to Serve USS Makin Island).

4. Pentagon’s largest defense contractor, Lockheed Martin won a contract worth $413.9 million from the U.S. Air Force for the production of the 15th lot of Joint Air-to-Surface Standoff Missile-Extended Range (JASSM-ER).

Per the contract, Lockheed Martin will supply 360 JASSM-ER missiles and tooling and test equipment. The work is scheduled to be completed by Aug 31, 2020.

JASSM is a stealthy, precision-guided cruise missile with a penetrating blast-fragmentation warhead. These missiles have been designed with infrared seekers and enhanced digital anti-jam Global Positioning System. JASSMExtended Range— a newer version of JASSM — is more fuel efficient and is powered by a turbo-fan engine instead of a turbo-jet engine (read more: Lockheed Martin Secures $414M Contract for JASSM-ER).

5. Boeing and military shipbuilder, Huntington recently announced that they have entered into a partnership to jointly design and produce Unmanned Undersea Vehicles (UUVs) to support the U.S. Navy’s Extra Large UUV program.

Through this partnership, Boeing’s preeminent UUV maritime engineering team will join hands with the nation’s leading shipbuilder to provide operational vehicles to the Navy years ahead of the standard acquisition process.

Toward this end, Boeing is currently testing its newest and largest UUV, Echo Voyager, off the Southern California coast. The vehicle is designed for multiple missions and could include a modular payload bay of up to 34 feet, offering enhanced endurance and increased payload capacity over traditional UUVs.

Performance

Most of the major defense stocks have put up a dismal performance over the last five trading sessions, except Boeing. Lockheed’s shares lost the most with a drop of 2.7%, followed by Rockwell Collins, Inc. .

For the last six months, however, the overall picture in the industry has been quite assuring, with most stocks gaining ground, except Textron. Notably, Boeing gained the maximum with its shares rising 22.82%, followed by General Dynamics.

The following table shows the price movement of the major defense players over the past five trading days and during the last six months

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