Lockheed Martin Corporation (LMT) announced that its team received a contract from the U.S. Navy to construct up to 10 Littoral Combat Ships within 2015. If all the options of the contact are exercised, its total value of the ship construction portion will be $3.6 billion.
The first among the 10 Littoral combat ships was acquired by the U.S. Navy in 2010 for a cost of $437 million. These combat ships were designed to help the Navy to confront the ever-changing global threats.
Lockheed Martin has teamed up with Marinette Marine Corporation, a Fincantieri company and naval architect Gibbs & Cox to complete the contract for the Littoral Combat Ships. Marinette Marine Corporation will construct these at its shipyard in Marinette, Wisconsin, while Gibbs & Cox will provide the engineering and design support for the combat ship.
Before this agreement was signed, a Lockheed Martin led industry team supplied the first U.S. Littoral Combat Ship, USS Freedom. This combat ship was commissioned by the U.S. navy in 2008 and is working successfully. The new combat ship will be designed taking into consideration the experience gathered from the operation of USS Freedom, plus special impetus on reducing cost and increasing efficiency.
During the third quarter earnings call, Lockheed Martin announced its earnings expectation for fiscal 2010 in the range of $6.75 to $6.95, which was way below the Zacks Consensus Estimate of $7.28 per share. The Zacks Consensus Estimates for fourth quarter fiscal 2010 and fiscal year 2011 are $2.13 per share and $6.57 per share, respectively.
Lockheed Martin currently retains a Zacks #3 Rank (short-term Hold rating). We provide a long-term Neutral rating on the stock due to its significant presence in the Army, Air Force, Navy and IT programs.
Based in Italy, Fincantieri S.p.A. engages in designing and ship building. The company is involved in fields of construction, repairs, and upgrading of merchant ships, naval vessels and large pleasure craft. It also builds military field with various product types, including surface vessels and submarines.
Based in Bethesda, Maryland, Lockheed Martin operates globally in research, design, development, manufacture, integration, operation, and sustainment of advanced technology systems and products. Primary competitors include Northrop Grumman Corporation (NOC) and The Boeing Company (BA).
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