Lockheed Wins $147M Contract For Hypersonic Glide Systems

Lockheed Martin Corp. (NYSE:LMT) has won a contract worth $147.3 million from the Defense Advanced Research Projects Agency (“DARPA”) for research work under the Tactical Boost Glide (“TBG”) program.

Contract Details

Per the contract, Lockheed Martin will conduct research on the hypersonic Mach 5 Tactical Boost Glide aircraft project.

However, information on the location of performance and time of completion were not disclosed by the company. The contract will use fiscal 2016 research and development funds.

What is the TBG Program?

The TBG program is a joint effort by the DARPA and the U.S. Air Force to develop technologies that facilitate the future production of air-launched, tactical-range hypersonic boost glide systems that run at five times the speed of sound (Mach 5) and beyond. This system will aid military operations from longer ranges with shorter response times and improved efficiency. It will likely enable militaries to counter increasingly advanced threats during offensive strike operations.

Hypersonic Vehicles: the Present & the Future

At present, hypersonic vehicles are being developed in a number of countries like the U.S., Russia and China for military purposes. Two years ago, there were reports that certain U.S. companies were working on the development of hypersonic vehicles under the Messianic program comprising the Falcon and the X-37.

Earlier this year, the Air Force’s Chief Scientist, Greg Zacharias had stated that the Air Force expects to add a few hypersonic weapons to its fleet by the 2020s. By the 2030s, it anticipates possessing a hypersonic drone or ISR (intelligence, surveillance, reconnaissance) vehicle and by the 2040s, it would have a hypersonic “strike” ISR platform capable of conducting both surveillance and weapon delivery.

Why Lockheed Martin?

Lockheed Martin has been working on some hypersonic (Mach 5 and above) aircraft like the SR-72 and the Falcon HTV-2. The company is also involved with the DARPA for two other programs. It has been investing substantially in component technologies and advanced materials needed for attaining hypersonic speeds. Thus, it does not come as a surprise that Lockheed Martin was selected for this contract.

Zacks Rank & Key Picks

Lockheed Martin currently has a Zacks Rank #3 (Hold). A few better-ranked stocks in the aerospace and defense space include Engility Holdings, Inc. (NYSE:EGL) , General Dynamics Corporation (NYSE:GD) and Leidos Holdings, Inc. (NYSE:LDOS) . While Engility Holdings sports a Zacks Rank #1 (Strong Buy), both General Dynamics and Leidos carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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