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Lockheed's (LMT) Unit Wins $398M Deal to Support F-35 Jets

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Lockheed Martin Corp.’s LMT business segment, Aeronautics, recently secured a modification contract involving F-35 fighter jets. The contract has been awarded by the Naval Air Systems Command, Patuxent River, MD.

Details of the Deal

Valued at $397.7 million, this agreement is expected to get completed by December 2024. Per the terms, the Aeronautics unit will procure initial spares to support F-35 Lightning deliveries from the 16th lot. The segment will also procure global spares pool and afloat spares package/deployment spares packages.

The contract will cater to the U.S. Air Force, Marine Corps, Navy, Foreign Military Sales customers and non-U.S. Department of Defense participants. Work related to the deal will be carried out in Fort Worth, TX.

F-35 to Remain a Growth Driver

The recent tiff between Russia and Ukraine led to nations increasing their defense spending on military equipment and arsenals to strengthen their defense systems. Military aircraft with multi-mission capabilities make an integral part of any efficient defense system.

It is imperative to mention that Lockheed Martin enjoys a dominant position in the global military aircraft space with its F-35 fleet as the stealth aircraft boasts features that make it an ideal choice for many nations. Moreover, LMT’s constant efforts to modernize and upgrade the aircraft with advanced technologies and enhance its capabilities to meet the current warfare needs boost demand significantly.

The F-35 program remained the largest revenue generator for its Aeronautics business unit and accounted for 68% of Aeronautics’ net sales in 2021.

Additionally, Lockheed Martin delivered 142 aircraft in 2021 compared with 120 delivered in 2020. The stealth aircraft is projected to continue to witness an upswing in its demand as the U.S. government’s current inventory objective is pegged at 2,456 aircraft for the U.S. Air Force.

Due to remarkable features, which are well-suited for any military mission, Lockheed Martin continues to witness a steady inflow of orders involving the F-35 jet. The latest contract win is a testament to that. This, in turn, shall bolster LMT’s revenues from the military aircraft arena.

Growth Prospects

Per Mordor Intelligence projections, the global military aircraft market is expected to witness a CAGR of more than 4% over the 2022-2031 period. Such projections indicate immense opportunities for Lockheed Martin to further reap the benefits of military aircraft market expansion.

Prominent defense majors that are involved in the manufacturing of military aircraft and can enjoy the perks of the military aircraft market’s growth trends are Northrop Grumman NOC, Airbus Group EADSY and Textron TXT.

Since its inception, Northrop Grumman has been a pioneer in the development of manned aircraft. From fighter jets and stealth bombers to surveillance and electronic warfare, Northrop Grumman has been providing manned solutions to customers worldwide. It has built some of the world’s most advanced aircraft, ranging from the innovative B-2 Spirit stealth bomber to the game-changing E-2D Advanced Hawkeye.

Northrop Grumman has a long-term earnings growth rate of 6.1%. NOC shares have appreciated 38.4% in the past year.

Airbus Group’s military aircraft comprises the A400M, the C295 tactical transporter, the new-generation A330 Multi Role Tanker Transport and the Eurofighter, the most modern swing-role fighter ever conceived.

Airbus Group’s long-term earnings growth rate is pegged at 12.4%. The Zacks Consensus Estimate for EADSY’s 2022 sales indicates year-over-year growth of 7% from the prior-year reported figure.

Textron’s military aircraft includes the Beechcraft T-6 training aircraft and the Beechcraft AT-6 light attack aircraft. The company also manufactures the Beechcraft Model 18 light bomber, the T-44 and T-34 training aircraft and the T-1A jet trainer.

Textron boasts a long-term earnings growth rate of 12.7%. The Zacks Consensus Estimate for TXT’s 2022 sales indicates year-over-year growth of 21.5% from the prior-year reported figure.

Price Movement

In the past year, shares of Lockheed Martin have rallied 11.3% against the industry’s fall of 40.5%.

Zacks Investment Research
Zacks Investment Research


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Zacks Rank

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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Lockheed Martin Corporation (LMT) : Free Stock Analysis Report

Northrop Grumman Corporation (NOC) : Free Stock Analysis Report

Textron Inc. (TXT) : Free Stock Analysis Report

Airbus Group (EADSY) : Free Stock Analysis Report

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