Lockheed Martin Corp.'s LMT business unit, Sikorsky Aircraft, recently secured a $542-million modification contract to support the Presidential Helicopter Replacement Program. The contract was awarded by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Per the deal, Lockheed Martin's Sikorsky unit will provide interim contractor support, initial spares, support equipment and system parts replenishment for the low rate initial production (LRIP) of Lot 1 Presidential Helicopters. Majority of work related to the deal will be performed in Stratford, CT, and Coatesville, PA. It is scheduled to be completed by April 2022.
A Brief Note on Presidential Helicopter Replacement Program
The Presidential Helicopter Replacement Program, officially known as VXX, replaces aging Marine One helicopters that carry the President of the United States. The military variant of the Sikorsky S-92 is an American helicopter under development to replace the United States Marine Corps' Marine One U.S. Presidential transport fleet.
In recent times, importance of military helicopters in the U.S. aerospace-defense market has grown immensely. The market has also gained significant traction due to advancements and integration of new tactical, logistical and other important features. Some of these developments have also been made by Lockheed Martin's Sikorsky Aircraft unit, which has paved a strong foundation for this defense giant in acquiring valuable helicopter-related contracts in recent times.
Interestingly, per ASD Media BV, the global military and government helicopter market is projected to see a CAGR of 8.4% to $13.9 billion by 2020, where medium-lift type helicopters are expected to dominate the market. Such projections are expected to augment profits for military and government helicopter makers like Lockheed Martin.
Shares of Lockheed Martin has gained 17.7% in the past six months compared with the industry's growth of 11.5%.
Zacks Rank & Other Key Picks
Lockheed Martin currently carries Zacks Rank #2 (Buy).
A few other top-ranked stocks in the same sector are Wesco Aircraft Holdings WAIR, Northrop Grumman Corp. NOC and Leidos Holdings LDOS, each carrying a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Wesco Aircraft's long-term growth estimates currently stand at 12%. The Zacks Consensus Estimate for 2019 earnings has increased 3.7% to 84 cents in the past 60 days.
Northrop Grumman came up with average positive earnings surprise of 18.50% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has increased 2.26% to $19.42 in the past 60 days.
Leidos Holdings came up with average positive earnings surprise of 6.81% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has risen 1.54% to $4.60 in the past 60 days.
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