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Lockheed Martin Secures $77.7-Million Cyber Security Contract

Zacks Equity Research
Updated

Lockheed Martin Corp. (LMT) recently secured a contract for providing cyber security support services to sustain the analysis, design, development, test, integration, deployment and operation of information technology systems and services for the cyber security workforce. Work related to the deal is scheduled to be over by December 2022.

Valued at $77.7 million, the contract was awarded by the Naval Air Warfare Center Weapons Division, China Lake, CA. Majority of the work will be carried out in China Lake, CA. Lockheed Martin will utilize fiscal 2018 working capital funds (Navy) to partially finance the deal.

Cyber Security Solutions

Lockheed Martin is a leading provider of a full spectrum of cyber capabilities supporting the defense and intelligence community customers. The company offers cyber security solutions to defend and exploit enterprise IT networks, radiofrequency spectrums, and military platforms on land, sea and air.

The company’s Cyber Kill Chain framework is part of the Intelligence Driven Defense model built for identification and prevention of cyber intrusions and enriches an analyst’s understanding of an adversary’s tactics, techniques and procedures.

Our View

For the U.S. Navy, cyber security is critical because its ability to coordinate ships, planes and personnel depends heavily on computer networks and satellites. This paves way for a big defense contractor like Lockheed Martin to deliver extensive cyber solutions which enable the U.S. Defense to manage cyber intrusions, insider threats and supply chain vulnerabilities.

Meanwhile, the fiscal 2018 budget allocated $1.5 billion to Homeland Security for countering cyber attacks, strengthening networking surveillance systems and protecting critical data-based infrastructure. This in turn is expected to help the company clinch more contracts related to cyber security.

Notably, the company’s Rotary and Mission Systems business that offers cyber security solutions witnessed a mere 0.2% top-line rise in the third quarter of 2017. Despite this inappreciable top-line improvement, the company has raised its 2017 sales outlook for this business unit. We may expect this enhanced guidance to have been driven by anticipations of more such contract wins like the latest one.

Price Movement

Lockheed Martin’s stock has rallied about 25.5% in a year compared with the broader industry’s 34%. This underperformance was primarily led by intense competition in the domestic and international markets.

 



 

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Zacks Rank & Key Picks

Lockheed Martin carries a Zacks Rank #3 (Hold). A few better-ranked stocks from the same sector includes Curtiss-Wright Corporation CW, Leidos Holdings, Inc. (LDOS) and Huntington Ingalls Industries, Inc. HII. While Curtiss-Wright sports a Zacks Rank #1 (Strong Buy), Leidos Holdings and Huntington Ingalls carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Curtiss-Wright Corporation Curtiss-Wright Corporation posted an average positive earnings surprise of 11.78% for the past four quarters. The Zacks Consensus Estimate for current-quarter earnings rose by 22 cents over the last 60 days.

Leidos Holdings has an average positive earnings surprise of 14.81% for the past four quarters. The Zacks Consensus Estimate for current-year earnings has improved by a penny in the past 30 days.

Huntington Ingalls posted an average positive earnings surprise of 14.22% for the last four quarters. The Zacks Consensus Estimate for current-year earnings has risen by 48 cents in the past 60 days.

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Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
 
Huntington Ingalls Industries, Inc. (HII) : Free Stock Analysis Report
 
Leidos Holdings, Inc. (LDOS) : Free Stock Analysis Report
 
Curtiss-Wright Corporation (CW) : Free Stock Analysis Report
 
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