United Launch Services, LLC (“ULS”), a subsidiary of a Lockheed Martin Corp. (NYSE:LMT) and The Boeing Co. (NYSE:BA) joint venture (“JV”), United Launch Alliance (“ULA”), has won a modification contract from the U.S. Air Force for launch vehicle production services (“LVPS”).
Contract Details
Valued at $269.2 million, the contract was awarded by the Space and Missile Systems Center, Los Angeles Air Force Base, CA.
Per the contract, ULS will provide the required services for fiscal 2017 LVPS to support the Air Force Delta IV Heavy’s launch vehicle configuration. The modification includes pre-priced contract line items for the Delta IV Heavy LV configuration.
Work is scheduled to be complete by Apr 30, 2020 and will be performed in Centennial, CO; Decatur, AL; and the Cape Canaveral Air Force Station, FL. The contract will use fiscal 2016 and 2017 space procurement funds.
A Brief Note on Delta IV Heavy
Delta IV Heavy is one version of the workhorse launcher family of the Delta IV Evolved Expendable Launch Vehicles (EELV). Among the Delta IV rockets, Delta IV Heavy is the most powerful launcher, and is equipped with a Common Booster Core (“CBC”) and two strap-on CBCs functioning as boosters, a five-meter second stage and a five-meter Payload Fairing.
About ULA
Formed about a decade ago, this 50:50 JV provides the U.S. government missions with affordable, reliable and assured access to space. It has three launch vehicles – Atlas V, Delta IV and Delta II. ULA's launch vehicles have played a major role in the U.S. space ventures given its highest commitment to crew safety and mission success.
Price Movement
Lockheed Martin’s stock has improved about 22.1% in the last one year, outperforming the Zacks Categorized Aerospace/Defense industry’s gain of 11.2%. This could be because the company continues to witness a steady flow of contracts from the Pentagon and other international customers.
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On the other hand, Boeing’s stock has improved about 2.6% in the last one year, lagging the Zacks Categorized Aerospace/Defense industry’s gain. This could be because Boeing continues to face challenges in the form of uncertainties related to high-cost programs, risks related to key project executions, order cancellations and stiff competition.
Zacks Rank & Key Picks
Lockheed Martin currently has a Zacks Rank #2 (Buy), while Boeing carries a Zacks Rank #3 (Hold). A couple of other favorably placed stocks in the aerospace and defense space include Engility Holdings, Inc. (NYSE:EGL) and Northrop Grumman Corporation (NYSE:NOC) .
On an average, Engility has delivered a positive earnings surprise of 23.19% in the trailing four quarters. The company’s 2016 earnings estimates increased 13.4% over the last 60 days. Engility sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Northrop Grumman, another Zacks Rank #1 stock, delivered a positive earnings surprise of 8.29% in the trailing four quarters. The company’s 2016 earnings estimates inched up 0.1% in the last 30 days.
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