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Lockheed Martin Wins $2.9B Missile Warning Satellites Deal
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Lockheed Martin Corp.’s (LMT - Free Report) Space Systems division recently won a $2.94 billion contract for developing three next-generation Overhead Persistent Infrared (OPIR) Geosynchronous Earth Orbit Space vehicles. The contract was awarded by the Space and Missile Systems Center, Los Angeles Air Force Base, CA.
Details of the Deal
Per the terms of the deal, the company will provide requirements analysis and procure critical path flight hardware along with conducting risk reduction efforts, which would lead to a system critical design review of the missile warning satellites.
Work related to the deal will be performed in Sunnyvale, CA and is expected to get completed by Apr 30, 2021. Lockheed Martin will utilize fiscal 2018 research, development, and test and evaluation funds for completing the task.
A Brief Note on the OPIR Geosynchronous Space Vehicles
The Space-Based Infrared System (SBIRS) program is designed to provide key capabilities in the areas of missile warning, missile defense and battlespace characterization via satellites in geosynchronous earth orbit (GEO), and ground-based data processing and control. Its ground software integrates infrared sensor programs of the U.S. Air Force with new IR sensors.
These new infrared surveillance and missile warning satellites, known as GEO-5 and GEO-6, will be based on the company’s modernized LM 2100 satellite bus, —an update that improves system affordability and resiliency, while adding the flexibility to use future payloads. Most importantly, it will provide improved missile warning capabilities that are more survivable against emerging threats.
Our View
In recent times, rising global tensions have enticed developing nations, like the United States to further strengthen its military prowess. Last year, North Korea conducted a dozen of missile tests, which included the testing of a hydrogen bomb and also the launch of a suspected intercontinental ballistic missile (ICBM), capable of hitting the U.S. mainland. This has rapidly increased the need for new missile warning satellites by the U.S. government, which could also be used against counter space weapons being developed by China and Russia.
Such rising demand should boost revenue growth of defense contractors like Lockheed Martinin the form of additional contracts for developing and designing new and upgraded missile warning satellites.
Notably, the company has increased its 2018 sales outlook, reflecting an increase of $350 million for its Space Systems segment, probably anticipating a solid inflow of such contracts from Pentagon.
Interestingly, in the second quarter, Lockheed Martin's space systems business achieved important milestones, the successful launch of its SBIRS GEO Flight-4 satellite with powerful sensors, capability to provide global coverage and increased accuracy to detect greater number of targets. Such major developments will enable the company cater to the U.S. Air Force's growing demand for its missile warning satellites, thereby improving its profit margin.
Price Movement
Lockheed Martin’s stock improved about only 5.4% in the last year compared with the industry’s growth of 18.7%. The underperformance may have been caused by the intense competition that the company faces in the aerospace-defense space for its broad portfolio of products and services, both domestically as well as internationally.
Zacks Rank & Other Stocks to Consider
Lockheed Martin currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the same sector are Aerojet Rocketdyne Holdings , Engility Holdings and Huntington Ingalls Industries (HII - Free Report) .
Aerojet Rocketdyne came up with an average positive earnings surprise of 9.27% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 30.9% to $1.27 in the last 90 days.
Engility Holdings delivered an average positive earnings surprise of 19% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 18.9% to $2.02 in the last 90 days.
Huntington Ingalls Industries came up with an average positive earnings surprise of 9.48% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 2.17% to $16.98 in the last 90 days.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Lockheed Martin Wins $2.9B Missile Warning Satellites Deal
Lockheed Martin Corp.’s (LMT - Free Report) Space Systems division recently won a $2.94 billion contract for developing three next-generation Overhead Persistent Infrared (OPIR) Geosynchronous Earth Orbit Space vehicles. The contract was awarded by the Space and Missile Systems Center, Los Angeles Air Force Base, CA.
Details of the Deal
Per the terms of the deal, the company will provide requirements analysis and procure critical path flight hardware along with conducting risk reduction efforts, which would lead to a system critical design review of the missile warning satellites.
Work related to the deal will be performed in Sunnyvale, CA and is expected to get completed by Apr 30, 2021. Lockheed Martin will utilize fiscal 2018 research, development, and test and evaluation funds for completing the task.
A Brief Note on the OPIR Geosynchronous Space Vehicles
The Space-Based Infrared System (SBIRS) program is designed to provide key capabilities in the areas of missile warning, missile defense and battlespace characterization via satellites in geosynchronous earth orbit (GEO), and ground-based data processing and control. Its ground software integrates infrared sensor programs of the U.S. Air Force with new IR sensors.
These new infrared surveillance and missile warning satellites, known as GEO-5 and GEO-6, will be based on the company’s modernized LM 2100 satellite bus, —an update that improves system affordability and resiliency, while adding the flexibility to use future payloads. Most importantly, it will provide improved missile warning capabilities that are more survivable against emerging threats.
Our View
In recent times, rising global tensions have enticed developing nations, like the United States to further strengthen its military prowess. Last year, North Korea conducted a dozen of missile tests, which included the testing of a hydrogen bomb and also the launch of a suspected intercontinental ballistic missile (ICBM), capable of hitting the U.S. mainland. This has rapidly increased the need for new missile warning satellites by the U.S. government, which could also be used against counter space weapons being developed by China and Russia.
Such rising demand should boost revenue growth of defense contractors like Lockheed Martinin the form of additional contracts for developing and designing new and upgraded missile warning satellites.
Notably, the company has increased its 2018 sales outlook, reflecting an increase of $350 million for its Space Systems segment, probably anticipating a solid inflow of such contracts from Pentagon.
Interestingly, in the second quarter, Lockheed Martin's space systems business achieved important milestones, the successful launch of its SBIRS GEO Flight-4 satellite with powerful sensors, capability to provide global coverage and increased accuracy to detect greater number of targets. Such major developments will enable the company cater to the U.S. Air Force's growing demand for its missile warning satellites, thereby improving its profit margin.
Price Movement
Lockheed Martin’s stock improved about only 5.4% in the last year compared with the industry’s growth of 18.7%. The underperformance may have been caused by the intense competition that the company faces in the aerospace-defense space for its broad portfolio of products and services, both domestically as well as internationally.
Zacks Rank & Other Stocks to Consider
Lockheed Martin currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the same sector are Aerojet Rocketdyne Holdings , Engility Holdings and Huntington Ingalls Industries (HII - Free Report) .
While Aerojet Rocketdyne Holdings sports a Zacks Rank #1 (Strong Buy), Engility Holdings and Huntington Ingalls carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Aerojet Rocketdyne came up with an average positive earnings surprise of 9.27% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 30.9% to $1.27 in the last 90 days.
Engility Holdings delivered an average positive earnings surprise of 19% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 18.9% to $2.02 in the last 90 days.
Huntington Ingalls Industries came up with an average positive earnings surprise of 9.48% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 2.17% to $16.98 in the last 90 days.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>