Defense prime Lockheed Martin Corp. ‘s LMT Space Systems business unit secured a modification contract for Trident II (D5) missile deployed system support. Work related to this deal is expected to be completed by Sep 30.
Valued at $21.9 million, the contract was awarded by the Strategic Systems Programs, Washington, D.C. Per the terms of the agreement, majority of the work will be executed in Sunnyvale, CA; Cape Canaveral, FL and the rest at different other parts of the U.S.
Fiscal 2017 weapons procurement (Navy) funds and fiscal 2017 operations and maintenance (Navy) funds will be utilized to complete the work.
A Brief Note on Trident II (D5)
Trident II (D5) is the latest generation of submarine-launched fleet ballistic missiles, developed and produced by Lockheed Martin. It was first deployed in 1990 and is currently aboard the OHIO-class and British VANGUARD-class submarines.
These missiles are equipped with multiple independently targetable reentry vehicles (MIRV) and thermonuclear warheads.
What’s Favoring Lockheed?
Lockheed Martin’s Space Systems Co. is the prime contractor of the Navy’s Trident missile. The company supplies technical and logistical support at sites where the missiles are deployed.
In Sep 2016, the Navy launched an unarmed Trident II D5 Fleet Ballistic Missile, following which the company announced that it is building on a 60-year partnership with the Navy. The declaration was made to ensure that the missile system remains capable for decades ahead through the company’s shared robust flight test plan.
The latest contract is expected to boost the company’s business substantially. Given that Trident II (D5) is one of the most advanced U.S. Navy’s missile system, the company remains confident of winning more of such contracts in the near term.
Lockheed Martin’s stock has returned 19.8% in the last one year, underperforming the 34.8% rally of the industry it belongs to. This could be attributed to the company’s F-35 program, which, despite being a prime project of the U.S. government, has been repeatedly criticised for being overtly expensive. Moreover, Lockheed Martin faces stiff competition from other defense majors like The Boeing Company BA , General Dynamics Corp. GD and Northrop Grumman Corp. NOC .
Lockheed Martin currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
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