Lockheed (LMT) Wins Deal to Supply Spare Parts for CH-53K

Lockheed Martin Corp.’s LMT business unit, Sikorsky, recently secured a contract for procurement and delivery of eight spare parts for the CH-53K aircraft. The deal has been awarded by the Naval Air Systems Command, Patuxent River, MD. Valued at $48.1 million, the contract is expected to get completed in December […]

Lockheed Martin Corp.’s LMT business unit, Sikorsky, recently secured a contract for procurement and delivery of eight spare parts for the CH-53K aircraft. The deal has been awarded by the Naval Air Systems Command, Patuxent River, MD.

Valued at $48.1 million, the contract is expected to get completed in December 2026. Majority of the work related to the deal will be carried out in Stratford, CT.

Recent Achievements of CH-53K Helicopter

The CH-53K helicopter takes forward Sikorsky’s 50 years of manufacturing and operational success with its CH-53A, CH-53D/G and CH-53E predecessors.

In February 2021, Israel made a decision to purchase Lockheed’s CH-53K helicopter over Boeing‘s BA CH-47, in an effort to further build on the Israel Defense Force’s capabilities. Such a strategic move by Israel could be pivotal for Lockheed’s growth in the trouble-ridden Middle East area over its top competitors.

What’s Favoring Lockheed?

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. Hence, this unit serves as a major revenue-generating division for this defense contractor.

In recent times, increasing geopolitical tensions across the world have prompted both developed and developing nations to effectively increase their defense budget. It is imperative to mention in this context that the fiscal 2022 defense budget proposal reflects funding worth $753 billion for U.S. defense programs, implying an annual increase of 1.7{92b8314a80b58944ba0df9bff999fd6692ae6ba618bc5950ca8fb5ab90484bed}. Interestingly, as part of this proposal, a sum of $1.7 billion has specifically been allotted to procure nine Sikorsky’s CH-53K King Stallion helicopters. No doubt this indicates solid order flow from the Pentagon for CH-53K along with its associated spares.

Lockheed is ramping up production of CH-53K with more than 30 aircraft in various stages of development and is on track for deployment in 2023 or 2024. Solid order growth along with such production ramp up should boost Lockheed’s top-line performance in the coming days.

Growth Prospects

Substantial fleet modernization plans of militaries deploying new and advanced attack helicopters are anticipated to support the combat helicopter market growth. Per a Morder Intelligence report, the global attack helicopter market is expected to witness a CAGR of more than 4{92b8314a80b58944ba0df9bff999fd6692ae6ba618bc5950ca8fb5ab90484bed} during 2020-2025 time period.
Such projections bode well for combat helicopter makers like Lockheed, Airbus SE EADSY, Boeing and Textron TXT.

Price Movement

Shares of Lockheed Martin have lost 9.7{92b8314a80b58944ba0df9bff999fd6692ae6ba618bc5950ca8fb5ab90484bed} in the past year compared with the industry’s 7.2{92b8314a80b58944ba0df9bff999fd6692ae6ba618bc5950ca8fb5ab90484bed} decline.


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Zacks Rank

The company 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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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

https://www.nasdaq.com/articles/lockheed-lmt-wins-deal-to-supply-spare-parts-for-ch-53k-2021-09-01

Shaqil Heaton

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