Lockheed Martin Secures $1.75B Defense Logistics Contract

Lockheed Martin Corp. (NYSE:LMT) has won a fixed-price with redetermination contract from the Defense Logistics Agency to provide consumable and depot level repairables for a range of weapon systems, which will be used by the U.S. Army, Navy, Air Force and Marine Corps.

With an initial term of five years, the contract offers one five-year option and has a ceiling value of $1.75 billion. Contracting activity is the Defense Logistics Agency Aviation, Richmond, VA.

Work is scheduled to be complete by Jun 29, 2022 and will be performed in Maryland, Georgia, Texas, New York, Massachusetts and New Jersey. The contract will use fiscal 2017 to fiscal 2022 defense working capital, and operations and maintenance funds.

The company has won another contract worth $323 million from Navy on Jun 30 to provide a laboratory for the F-35 Lightening II. The laboratory would contain a hardware in-the-loop (“HITL’)-based system to test and examine mission data file (“MDF”) performance in an operationally representative environment; a set of tools to manufacture, alter, manage, analyze and issue MDFs and MDF sets, and build and load mission data loads in the HITL, with limited product support elements.

Work is scheduled to be complete by Aug 2020. The company will carry out majority of the work in Fort Worth, TX, while the rest will be performed in Orlando, FL; Nashua, NH; El Segundo, CA; and San Diego, CA.

Again, the company received a third modification contract from the Missile Defense Agency for the development, support and incorporation of the Terminal High Altitude Area Defense (THAAD) system.

Work is scheduled to be complete by Jan 31, 2017. The company will carry out the work in Huntsville, AL; Troy, AL; Grand Prairie, TX; and Sunnyvale, CA. With the latest modification, the maximum quantity and order value of the contract has been increased by $205 million, resulting in a total contract value of $995.2 million.

Lockheed Martin is the largest U.S. defense contractor, with a platform-centric focus that guarantees a steady inflow of follow-on orders from its leveraged presence in the U.S. Army, Air Force, Navy and IT programs. The company’s diverse product offerings allow it to enjoy a consistent stream of orders from the U.S. and allied partners.

Lockheed Martin currently has a Zacks Rank #3 (Hold).

Stocks to Consider

A few better-ranked stocks in the aerospace and defense space include Engility Holdings, Inc. (NYSE:EGL) , Leidos Holdings, Inc. (NYSE:LDOS) and Huntington Ingalls Industries, Inc. (NYSE:HII) , each carrying a Zacks Rank #2 (Buy).

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