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Lockheed Martin Wins $486.5M F-22 Modification Contract

Defense major Lockheed Martin Corp. (LMT) has won a $486.5 million modification contract from the U.S. Air Force. The company is now entitled to exercise an option year on the F-22 contract that had been previously awarded by the Department of Defense (DoD). Per the contract, the company was supposed to provide services for the sustainment of F-22 aircraft.

Lockheed Martin Aeronautics Co. at Fort Worth, Texas will be the main site for work. The contracting activity is Air Force Life Cycle Management Center, Hill Air Force Base, Utah. It is expected that the contract work will be over by 2015 end.

The F-22 had become operational in 2005. Since then, the F-22 aircraft has seen a decent number of contract wins come its way. Recently in Oct 2014, Lockheed Martin has won a $33.4 million modification contract for the F-22 jets. Previously in 2013, Lockheed Martin had been awarded a $6.9 billion contract by the Pentagon to upgrade F-22 air fighters.

Moreover, despite the sword of sequestration hanging over the defense industry, Lockheed Martin is on a winning spree, being awarded with multiple contracts by the Pentagon. In Oct 2014, Lockheed Martin was awarded a $4 billion contract to develop the eighth batch comprising 43 units of F-35 fighter jets.

It had also won a foreign military sales modification contract worth $595 million from the U.S. Army. The contract was aimed at procuring PATRIOT Advanced Capability (PAC-3) production items, comprising 152 PAC-3 cost reduction initiative missiles, 15 PAC-3 launcher modification kits, the associated ground equipment, tolling and initial spares.

Lockheed Martin is the largest U.S. defense contractor, contending with major players like The Boeing Co. (BA), Northrop Grumman Corp. (NOC) and General Dynamics Corp. (GD). The company’s products guarantee a steady inflow of follow-on orders from a leveraged presence in the Army, Air Force, Navy and IT programs. Its diverse product offerings bring a consistent inflow of contracts from the U.S. DoD and allied countries.

Lockheed Martin currently holds a Zacks Rank #3 (Hold).

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