Defense contractor Lockheed Martin Corporation (LMT) announced that it received a contract worth $3.5 billion from the Defense Department to manufacture 31F-35 Lighting II stealth fighter aircraft in the fourth lot of low-rate initial production (LRIP 4).
As per the new contract Lockheed will manufacture 10 F-35A conventional takeoff and landing for the U.S. Air Force, 16 F-35B takeoff/vertical landing variants for the U.S. Marine Corps, 4 F-35C aircraft for the U.S. Navy and an F-35B aircraft for the United Kingdom.
Additionally, the contract also funds manufacturing-support equipment, flight test instrumentation and ancillary mission equipment. Including the long-lead funding previously received, the total contract value for LRIP 4 is $3.9 billion.
The Aeronautics division of Lockheed is responsible for the development of F-35 aircraft. The sales from this division during the third quarter 2010 increased 7% from the comparable prior-year period. This division is expected to see another year of strong growth driven by the F-35 program and C-130 deliveries.
F-35 is a supersonic, multi-role, 5th generation stealth fighter. Lockheed is developing the F-35 with its principal industrial partners, Northrop Grumman Corporation (NOC) and BAE Systems plc (BAESY).
Like other defense contractors, Lockheed to a large extent depends upon defense spending. The U.S. government is presently planning to trim down its defense expenditure, which can impact the major defense primes and Lockheed is no exception.
Lockheed Martin currently retains a Zacks #4 Rank (short-term Sell rating). We provide a long-term Underperform rating on the stock.
Based in Bethesda, Maryland, Lockheed Martin operates globally in the fields of research, design, development, manufacture, integration, operation, and sustainment of advanced technology systems and products.
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