Lockheed Martin (LMT) Wins $332M GMLRS Rocket Contract

Lockheed Martin Corp. (NYSE:LMT) has received a $331.8 million contract from the U.S. Army for the Lot 11 Guided Multiple Launch Rocket System (“GMLRS”) rockets for domestic as well as international customers.

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Per the contract, Lockheed Martin will produce GMLRS Alternative Warhead rockets, GMLRS Unitary rockets and Reduced-Range Practice Rockets for the U.S. Army and the U.S. Marine Corps.

This contract also covers Foreign Military Sales (“FMS”) to Israel, Finland, Jordan and Singapore.

The production work under this contract will be carried out at Lockheed Martin facilities in Camden, Arkansas, and Dallas through Mar 2018.

GMLRS, an all-weather rocket, is designed for quick deployment, offering a precision strike beyond most conventional weapons. Lockheed Martin also added that the alternative warhead was the first munition developed to service area targets without the effects of unexploded ordnance, complying with the Pentagon's cluster munitions policy.

Moreover, the reduced-range rocket allows users to train with realistic, full-motored rockets with limited flight range. This makes them suitable for smaller test ranges.

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.

This defense giant not only reported better-than-expected first-quarter 2016 earnings in spite of incurring severance expenses, but also boosted its full-year outlook for earnings, revenues, operating profit and cash flow.

Also, in a volatile defense budget scenario, international contracts are more than welcome. Lockheed Martin generated 21% of total sales from international customers in 2015 (up from 19.4% in 2014), including FMS.

Zacks Rank

Lockheed Martin carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the aerospace and defense space include Leidos Holdings, Inc. (NYSE:LDOS) , Engility Holdings, Inc. (NYSE:EGL) and CAE Inc. (TO:CAE) , all with a Zacks Rank #2 (Buy).

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