The largest US defense contractor, Lockheed Martin Corporation (LMT) won a $10 million contract from the U.S. Navy for the development of software for the aircrews of MH-60R and MH-60S multi-mission helicopters designed and manufactured by Sikorsky Aircraft Corporation, to enable them to pre-plan their missions. The software will be known as unique planning component.
The software will be configured with the U.S. military’s Joint Mission Planning System (JMPS) with the newest mission characteristics, including anti-submarine warfare, anti-surface warfare, airborne mine countermeasures, search and rescue and ship-to-ship cargo resupply; unique to MH-60R and MH-60S multi-mission helicopters.
Joint Mission Planning System was developed by the U.S. Navy and Air Force to standardize the filing of mission flight plans of the aircrews. The system is based on a commercial-off-the-shelf architecture.
Lockheed Martin, in the next two and half years, will initially develop and test the software in Owego, NY, with further tests to be conducted at Naval Air Weapons Station, Point Mugu, CA, and the Naval Air Station, Patuxent River, MD. The software is expected to be available in 2012.
Lockheed Martin is the largest provider of IT services, systems integration, and training to the U.S. government. Apart from serving the Department of Defense and other federal agencies, the company derives its businesses from foreign governments as well as from commercial sales of its products, services and platforms.
The future prospects of Lockheed Martin to a large extent depend upon defense spending, and we believe the company stands well positioned to benefit from higher defense outlays. In addition, the company’s focus on debt repayment and share buyback is encouraging and will continue to improve the shareholder return.
However, political uncertainty makes future defense budgets vulnerable to cutbacks. Moreover, execution risk of major programs and higher pension liability remains the primary cause of concern. Prime competitors of the company include Boeing Co. (BA), Northrop Grumman Corporation (NOC) and Raytheon Co. (RTN).
We currently maintain a Zacks #3 Rank (Hold) and a long-term Neutral recommendation on the stock.
BOEING CO (BA): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis Report
NORTHROP GRUMMN (NOC): Free Stock Analysis Report
RAYTHEON CO (RTN): Free Stock Analysis Report
Zacks Investment Research
