US Army Intelligence and Security Command has selected defense contractor Lockheed Martin (LMT) to compete for task orders worth $492 million through the next five years under its OMNIBUS-III contracting vehicle.
The company, upon receiving the contracts, will deliver innovative solutions and analytic subject matter expertise to support Army Intelligence missions.
In October, Lockheed Martin already won contract worth $132 million from the Department of Defense.
The company will continue to benefit from defense outlays and contract wins. Continued contract wins will help Lockheed Martin to post solid revenue growth, going forward. Revenues in second quarter 2010 increased 3.3% year over year to $11.4 billion.
During the second quarter conference call, management provided its revenue outlook for fiscal 2010 in a range of $45.5 billion – $46.5 billion and its earnings outlook of $7.15 – $7.35 per share.
The Zacks Consensus Estimates for third quarter 2010 and fourth quarter 2010 are $1.78 per share and $2.16 per share, respectively. For fiscal years 2010 and 2011, the Zacks Consensus Estimates are $7.24 per share and $7.46 per share, respectively.
A large percentage of Lockheed Martin’s businesses come from the US government. Consequently, the company’s revenues would be substantially dented if the $100 billion proposed reduction of U.S. defense expenses is carried out over the next five years.
We maintain our Neutral recommendation on Lockheed Martin. The quantitative Zacks #4 Rank (short-term Sell rating) for the company indicates downward pressure on the stock over the near term.
Based in Bethesda, Maryland, Lockheed Martin Corporation is a diversified defense company that primarily researches, designs, develops, manufactures, integrates, operates and sustains technology systems and products, apart from providing a host of management, engineering, technical, scientific, logistic and information services.
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