Lockheed Wins $265M Deal To Aid Korea's F-35 Jet Program
Zacks Investment Research | Mar 19, 2019 11:38PM ET
Lockheed Martin Corp.’s (NYSE:LMT) Aeronautics business unit recently secured a modification contract to support the F-35 Lightning II Joint Strike program. The deal has been awarded by the Naval Air Systems Command, Patuxent River, Maryland.
Details of the Deal
Valued at $264.7 million, the contract will cater to the Korean government. Under the terms of the agreement, the company will offer additional operation and technical services to aid Korea’s F-35 Lightning II program.
Work related to the deal is scheduled to be over by June 2020 and will be carried out in Fort Worth, TX.
A Brief Note on F-35 Program
The F-35 Lightning is a supersonic, multi-role fighter jet that represents a quantum leap in air-dominance capability, offering enhanced lethality and survivability in hostile, anti-access airspace environments. It is being used by the defense forces of the United States and 11 other nations chiefly owing to its advanced stealth, integrated avionics, sensor fusion, superior logistics support and powerful integrated sensors capabilities.
What Favors Lockheed Martin?
The F-35 is Lockheed Martin’s largest program that generates more than 25% of its total sales. The program fueled annual revenue growth by 19.6% at the company’s Aeronautics division. Keeping up with this trend, we may expect the latest contract win to enable the Aeronautics unit to deliver similar or even better performance in the upcoming quarters.
Meanwhile, production of F-35 is expected to increase in the years ahead, given the U.S. government’s current inventory objective of 2,456 aircraft for the Air Force, Marine Corps and Navy along with commitments from the company’s eight international partners, overseas customers and rising demand for military jets globally.
Taking into account the F-35 program’s solid estimated production rate, the latest contract win involving technological enhancement of these jets should further provide a boost to this program in the coming days.
These apart, the fiscal 2019 defense budget provisioned for a spending plan of $21.7 billion on aircraft, which is encouraging. In particular, the budget hinted at a prospective improvement in Lockheed Martin’s F-35 Joint Strike Fighter program, which has been allotted $10.7 billion and additional funding for the procurement of 97 F-35 Joint Strike Fighters.
Such developments reflect solid prospects for Lockheed Martin’s F-35 program, which are likely to boost the company’s profit margin.
Price Movement
In a year’s time, shares of Lockheed Martin have lost 11.3% compared with theZacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.