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Lockheed Martin (LMT) Unit Wins $61M AEGIS Support Contract
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Lockheed Martin Corp.'s (LMT - Free Report) Rotary and Mission Systems business division has won a modification contract to exercise options for providing support services for the Advanced Electronic Guidance and Instrumentation System (AEGIS) program.
Contract Details
The contract, valued at $61.3 million, has been awarded by the Naval Sea Systems Command, Washington, D.C.
Per the modification, Lockheed Martin will offer services like technical engineering, configuration management, related equipment/supplies, quality assurance, information assurance, and other operation and maintenance efforts needed for the AEGIS development and test sites, including the Combat Systems Engineering Development Site, SPY-1A Test Facility and the Naval Systems Computing Center.
The work is scheduled to be completed by Jun 2018 and will be executed in Moorestown, NJ. The contract will use fiscal 2013 and 2015 shipbuilding and conversion (Navy); 2017 research, development, test, and evaluation (Navy); and foreign military sales funds.
What's AEGIS?
Lockheed Martin's AEGIS Ballistic Missile Defense (ABMD) is the naval component of the U.S. Missile Defense Agency's (MDA) Ballistic Missile Defense System (BMDS). It is the world's only maritime BMDS that can simultaneously attack land targets, submarines and surface ships while protecting the fleet against aircraft, cruise missiles and ballistic missiles.
Over time, AEGIS has evolved with new capabilities to counter emerging threats and leverage new technologies. Its latest configuration, Baseline 9, offers an open architecture framework to allow extreme flexibility. Notably, AEGIS Combat System Engineering Agent, Lockheed Martin, has been consistently developing capabilities and finding innovative ways to deploy them across a fleet of over 100 ships in the U.S. and overseas.
In Aug 2016, this defense major had announced plans to expand the global AEGIS fleet in the U.S., Japan and the Republic of Korea, under a $490 million deal to bring integrated air and missile defense (IAMD) capabilities to new destroyers. These ships will be equipped with Aegis Baseline 9, capable of IAMD.
Our View
Lockheed Martin's Rotary and Mission Systems business carries out some of the company's high-profile programs, including the Aegis Combat System, Littoral Combat Ship, MH-60 helicopter avionics along with military and commercial orders. It generated revenues of $3.1 billion in the first quarter of 2017, reflecting 28% of total revenues.
Moving ahead, the company's improved cash outlook for 2017 reflects enhanced cash performance at the Rotary and Mission Systems division. That said, the aforementioned contract gain has the potential to further boost revenues of this business division.
Currently, Lockheed Martin's Aegis system is the maritime weapon system of choice for six powerful nations. Considering this and the above mentioned developments, we expect the latest contract to help management successfully attain the sales target for the division.
Price Movement
Lockheed Martin's stock has been up about 18.6% in the last one year, underperforming the Zacks categorized Aerospace/Defense industry's gain of 28.1%. 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. Budget deficits and political uncertainty make future defense budgets vulnerable to cutbacks. As a result, Lockheed Martin's performance lagged behind the likes of General Dynamics Corp. (GD - Free Report) , Textron, Inc. (TXT - Free Report) and The Boeing Co. (BA - Free Report) that have outperformed the industry.
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
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Lockheed Martin (LMT) Unit Wins $61M AEGIS Support Contract
Lockheed Martin Corp.'s (LMT - Free Report) Rotary and Mission Systems business division has won a modification contract to exercise options for providing support services for the Advanced Electronic Guidance and Instrumentation System (AEGIS) program.
Contract Details
The contract, valued at $61.3 million, has been awarded by the Naval Sea Systems Command, Washington, D.C.
Per the modification, Lockheed Martin will offer services like technical engineering, configuration management, related equipment/supplies, quality assurance, information assurance, and other operation and maintenance efforts needed for the AEGIS development and test sites, including the Combat Systems Engineering Development Site, SPY-1A Test Facility and the Naval Systems Computing Center.
The work is scheduled to be completed by Jun 2018 and will be executed in Moorestown, NJ. The contract will use fiscal 2013 and 2015 shipbuilding and conversion (Navy); 2017 research, development, test, and evaluation (Navy); and foreign military sales funds.
What's AEGIS?
Lockheed Martin's AEGIS Ballistic Missile Defense (ABMD) is the naval component of the U.S. Missile Defense Agency's (MDA) Ballistic Missile Defense System (BMDS). It is the world's only maritime BMDS that can simultaneously attack land targets, submarines and surface ships while protecting the fleet against aircraft, cruise missiles and ballistic missiles.
Over time, AEGIS has evolved with new capabilities to counter emerging threats and leverage new technologies. Its latest configuration, Baseline 9, offers an open architecture framework to allow extreme flexibility. Notably, AEGIS Combat System Engineering Agent, Lockheed Martin, has been consistently developing capabilities and finding innovative ways to deploy them across a fleet of over 100 ships in the U.S. and overseas.
In Aug 2016, this defense major had announced plans to expand the global AEGIS fleet in the U.S., Japan and the Republic of Korea, under a $490 million deal to bring integrated air and missile defense (IAMD) capabilities to new destroyers. These ships will be equipped with Aegis Baseline 9, capable of IAMD.
Our View
Lockheed Martin's Rotary and Mission Systems business carries out some of the company's high-profile programs, including the Aegis Combat System, Littoral Combat Ship, MH-60 helicopter avionics along with military and commercial orders. It generated revenues of $3.1 billion in the first quarter of 2017, reflecting 28% of total revenues.
Moving ahead, the company's improved cash outlook for 2017 reflects enhanced cash performance at the Rotary and Mission Systems division. That said, the aforementioned contract gain has the potential to further boost revenues of this business division.
Currently, Lockheed Martin's Aegis system is the maritime weapon system of choice for six powerful nations. Considering this and the above mentioned developments, we expect the latest contract to help management successfully attain the sales target for the division.
Price Movement
Lockheed Martin's stock has been up about 18.6% in the last one year, underperforming the Zacks categorized Aerospace/Defense industry's gain of 28.1%. 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. Budget deficits and political uncertainty make future defense budgets vulnerable to cutbacks. As a result, Lockheed Martin's performance lagged behind the likes of General Dynamics Corp. (GD - Free Report) , Textron, Inc. (TXT - Free Report) and The Boeing Co. (BA - Free Report) that have outperformed the industry.
Zacks Rank
Lockheed Martin currently has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here
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While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
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