Lockheed (LMT) Wins $205M Deal to Aid the MH-60R Program
Lockheed (LMT) is set to provide non-recurring engineering for the Phase II design and development of unique hardware and software for the MH-60R prog...
Lockheed Martin Corp. LMT recently clinched a modification contract of the MH-60R development program to support India’s government. The Naval Air Systems Command, Patuxent River, MD awarded the deal.
Details of the Deal
Valued at $208.1 million, the contract is projected to be completed in September 2027. Per the terms, Lockheed will provide non-recurring engineering for the Phase II design and development of unique hardware and software for the MH-60R program.
The majority of the work related to this deal will be carried out in Owego, NY.
Significance of MH-60R Aircraft
The MH-60R Seahawk helicopter is the world’s most advanced maritime helicopter designed to operate from frigates, destroyers, cruisers, and aircraft carriers. It is equipped for a range of missions, including anti-submarine warfare, anti-surface warfare, search-and-rescue, naval gunfire support, surveillance, logistics support, personnel transfer, and vertical replenishment.
Currently, it is operational and deployed with the U.S. Navy as the primary anti-submarine warfare and anti-surface weapon system for Open Ocean and littoral zones.
Sikorsky’s Place in Combat Helicopter space
Factors like advancements and integration of new tactical and logistical features along with the inclusion of improved radar systems and the availability of advanced system engineering services have boosted demand for military helicopters these days. With Lockheed Martin, being a prominent helicopter manufacturer, its Sikorsky unit remains in the spotlight whenever the prospects of the combat helicopter market are discussed.
To this end, it is imperative to mention that Lockheed’s Sikorsky unit provides military and rotary-wing aircraft to all five branches of the U.S. armed forces along with military services and commercial operators in 40 nations. In the fiscal 2022 defense budget, a $3.5 billion fund has been allotted for Sikorsky’s helicopter, which should usher in a solid inflow of contracts for its varied combat-proven copters, the latest contract win being a bright example of that.
Such contract wins for Sikorsky’s helicopters tend to boost the top-line performance of Lockheed’s Rotary and Missions Systems (RMS) business division, which encompasses the Sikorsky business line. On its second-quarter 2021 earnings call, Lockheed raised its sales outlook for the RMS unit by $150 million, primarily driven by the volume at Sikorsky.
What Lies Ahead?
The global attack helicopter market is estimated to witness a CAGR of more than 4% during the 2020-2025 period, per the latest forecast made by market research firm, Mordor Intelligence. This indicates solid growth opportunities for helicopter makers like Lockheed Martin.
Lockheed Martin’s stock has gained 4.3% in the past six months against the industry’s decline of 6.9%.
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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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