Lockheed Martin Corporation (LMT) has received a follow-on contract worth $980 million from the Missile Defense Agency (“MDA”) to continue work on the Command, Control, Battle Management and Communications (“C2BMC”) program. The Missile Defense Agency has provided the contract to five major defense contractors.
As Lockheed Martin leads the consortium of major defense contractors, it will be responsible for the main contract. The other four contractors that make the Missile Defense National Team will continue development, operations, and sustainment work. These contractors include Northrop Grumman Corporation (NOC), The Boeing Company (BA), Raytheon Company (RTN) and General Dynamics Corporation (GD).
The C2BMC program is the integrating element for the Ballistic Missile Defense System and connects various sensors and weapon systems. It has the capability to assimilate and coordinate missile defense systems and operations globally which lead to an optimized defense against all ranges of threats. Per the contract, the five contractors together will provide in-depth technical knowledge to achieve the most evolved capabilities for the Ballistic Missile Defense System. The majority of the work is conducted in Arlington, Virginia, Huntsville, Alabama, and Colorado Springs, Colorado.
Over the longer run, we expect the prime contractor, Lockheed Martin, to register a stable performance due to a leveraged presence in the Army, Air Force, Navy and IT programs. Moreover, the company continues to benefit from strong defense spending on a number of its platform programs, such as the F-35 Lightning II Joint Strike Fighter, C-130 Hercules & C-5 Galaxy transport aircrafts, F-16 Fighting Falcon multi-role jet, MH-60 Helicopters, the Advanced Extremely High Frequency & the Global Positioning Satellite III system satellites, the Littoral Combat Ship, the Aegis Weapons System for mobile and sea-based missile defense and the Terminal High Altitude Area Defense system.
However, we currently remain on the sidelines due to U.S. economic fundamentals being kept on a leash as the Euro-crisis continues which keeps the risk high for further cutbacks in defense budgets. The company presently retains a short-term Zacks #4 Rank (Sell). We have a long-term Neutral recommendation on the stock.
Based in Bethesda, Maryland, Lockheed Martin is a global security company that is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services.
To read this article on Zacks.com click here.
Zacks Investment Research
