Defense contractor Lockheed Martin Corporation (LMT) delivered the first MC-130J Combat Shadow II to the United States Air Force’s Special Operations Command (AFSOC). The aircraft was flown from Lockheed Martin Aeronautics’ facility to Cannon Air Force Base, New Mexico. This aircraft is the first of a batch of 20 ordered from Lockheed.
The Lockheed MC-130J is a versatile multimission tactical airlifter. It is capable of worldwide employment for missions requiring clandestine single or multi-ship low-level aerial refueling of Special Operation Force vertical and tilt-rotor aircraft along with infiltration, re-supply and infiltration by airdrop or landing on remote airfields.
The aircraft has an Enhanced Service Life Wing, Enhanced Cargo Handling System, a Universal Aerial Refueling Receptacle Slipway Installation (boom refueling receptacle), an electro-optical/infrared sensor, a combat systems operator station on the flight deck, and dual Satcom.
In July this year, Lockheed Martin Corporation reported strong second quarter fiscal 2011 earnings of $2.06 per share, sailing past the Zacks Consensus Estimate of $1.94. At the end of the second quarter of 2011, cash and cash equivalents were $3.27 billion versus $2.26 billion at fiscal-end 2010. Long-term debt rose marginally to $5.03 billion versus $5.02 billion at fiscal-end 2010.
On October 17, 2011, the company is expected to release its third quarter results. The Zacks Consensus Estimates for third quarter 2011 and fiscal year 2011 are currently at $1.80 per share and $7.53 per share, respectively.
Lockheed Martin is the largest U.S. defense contractor with a platform-centric focus that guarantees a steady inflow of follow-on orders from a leveraged presence in the Army, Air Force, Navy and IT programs. Also, the company ensures a steady shareholder return given its focus on debt repayment, its ongoing share repurchase program and the incremental dividend.
In reality, these positives are offset by defense budget cuts, headwinds in margins, higher pension liability and risk regarding retrenchment cost recovery. However, we believe market pessimism is fully accounted for in the current valuation, which is priced at a discount to both its industry peers and the overall market. The company presently retains a short-term Zacks #3 Rank (Hold). We have a long-term Neutral recommendation on the stock.
Headquartered 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. The company mainly competes with Northrop Grumman Corporation (NOC) and Raytheon Company (RTN).
