Featured Company News – Pentagon Clears $3.7 Billion Interim Payment to Lockheed Martin for Procurement of 50 F-35s

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LONDON, UK / ACCESSWIRE / August 1, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Lockheed Martin Corp. (NYSE: LMT), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=LMT. The Pentagon on July 28, 2017, cleared $3.7 billion to be paid to Lockheed Martin’s subsidiary, Lockheed Martin Aeronautics Co., as interim payment for the procurement of 50 F-35 Lightning II aircrafts. These aircrafts are intended for non-US based foreign military customers. For immediate access to our complimentary reports, including today’s coverage, register for free now at:

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The contract

Lockheed Martin is already covered under the “undefinitized contract action” wherein the Company and its affiliates have been producing the F-35s for US military and non-US based foreign military sales (FMS). This is the Company’s 11th lot being produced for the Pentagon and terms of the agreement for this lot are in the process of being finalized. In the meanwhile, till the terms are finalized, the Company will continue its production schedule for the F-35s.

Out of the 50 F-35s being procured, one F-35B aircraft is for the UK, one F-35A aircraft for Italy, eight F-35A aircrafts are for Australia, eight F-35A aircrafts for the Netherlands, four F-35A aircrafts for Turkey, six F-35A aircrafts for Norway, and the remaining 22 F-35A aircrafts are for FMS customers.

The contract also stipulates that Lockheed Martin provides equipment and maintenance for the above customers. The current contract will be under the purview of The Naval Air Systems Command, Patuxent River, Maryland.

In the same notification, the Company was also allocated $218.72 million as a part of the previously awarded cost-plus-incentive-fee contract for recurring logistics support and sustainment services for F-35 Lightning II aircraft supplied to the Air Force, Navy, Marine Corps, non-Department of Defense (DoD) participants, and foreign military sales customers. The contract covers services like ground maintenance activities, action request resolution, depot activation activities, Automatic Logistics Information System operations and maintenance, reliability, maintainability, and health management implementation and support, supply chain management, and activities to provide and support pilot and maintainer initial training.

About the F-35s

Lockheed Martin’s F-35 Lightning II is a 5th Generation fighter jet. It offers a combination of advanced stealth with fighter speed and agility. It is equipped with fully fused sensor information, network-enabled operations, and advanced sustainment. These fighter jets are expected to replace the legacy fighters and deployed for use in the US Air Force, Navy, and Marine Corps as well as militaries of 10 other countries.

Lockheed Martin produces three variants of the F-35: the F-35A, F-35B, and F-35C. The A model is intended for use by the US Air Force and US allies; the B model which can handle short take-offs and vertical landings is intended for the US Marine Corps and British Navy, while the C model is a carrier-variant.

F-35 fighter jet on July 24, 2017, reached a new milestone as it exceeded 100,000 flight hours. Simultaneously, the F-35 Integrated Test Force teams completed the test requirements for the System Development and Demonstration (SDD). The development flight testing includes validating the final release of 3F software, F-35B ski jump testing, F-35B austere site operations, high-Mach Loads testing for both the F-35B and F-35C, and completion of the weapons delivery accuracy tests.

Rate Negotiations for F-35s

The Pentagon is aiming to buy 2,457 jets from the Company and is negotiating lower rates for the cost of each jet. Earlier Pentagon used to pay $102 million for each F-35 jet. However, in February 2017, Pentagon while ordering the 10th batch of the jets negotiated and agreed to pay less than $95 million for each F-35A model. The Pentagon is discussing with Lockheed Martin to get prices of the 11th lot lowered than the 10th lot.

The terms of the 11th low rate initial production contract is expected to be finalized by end of 2017.

Last Close Stock Review

On Monday, July 31, 2017, the stock closed the trading session at $292.13, marginally climbing 0.59% from its previous closing price of $290.41. A total volume of 1.14 million shares have exchanged hands, which was higher than the 3-month average volume of 921.52 thousand shares. Lockheed Martin’s stock price rallied 8.83% in the last three months, 15.54% in the past six months, and 15.59% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have surged 16.88%. The stock is trading at a PE ratio of 23.00 and has a dividend yield of 2.49%. At Monday’s closing price, the stock’s net capitalization stands at $84.28 billion.

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