Summary
- Lockheed Martin added an importing IDIQ contract for the C-130J valued at $15B.
- Smaller but also very important contracts were for the Hellfire missiles and F-35.
- 2020 contract awards reach $47.7B of which $22.2B was obligated at award.
- Looking for a helping hand in the market? Members of The Aerospace Forum get exclusive ideas and guidance to navigate any climate. Get started today »
Recently, we launched the Defense Contracts Monitor that we populate weekly with new contracts awarded to Boeing ( BA) and Lockheed Martin ( LMT). Currently the monitor consists of more than 600 contracts and we are working on quickly expanding the number of years and contracts covered in the monitor but also expanding toward other companies in the defense industry. With market sentiment turning negative for commercial aircraft, we saw more interest in the defense side and that triggered me to relaunch defense coverage including names such as Lockheed Martin, and we are aiming to expand that going forward.
Source: Wallpaper Abyss
Lockheed Martin has been one of the names I wrote about earlier. Since then, shares of Lockheed Martin gained almost 68% vs. 50% for the S&P 500. Unfortunately due to local regulations I'm not allowed to own shares of Lockheed Martin, but names like Lockheed Martin are the kind of names I really would like to be a core holding in my portfolio. In this report, I want to have a look at the order inflow for Lockheed Martin during the month of July. You can read the June report here. For this analysis, we used the newly-developed Defense Contracts Monitor which we have made available to subscribers of The Aerospace Forum.
Note from Author: Boeing recently changed the way it reports orders and deliveries. As a result, we had to rework the way the data is loaded into our databases which resulted in the monthly reports for Boeing, Airbus and Lockheed Martin (LMT) to be delayed.
C-130 Lifts Lockheed Martin Contract Awards
Figure 1: Lockheed Martin contracts in July (Source: AeroAnalysis)
In July, Lockheed Martin was awarded 16 contracts valued $17.8B with funds obligated on time of award standing at $2.6B or 15%.
By far the biggest contract was for the C-130 platform. Lockheed Martin was awarded a $15,000,000,000 indefinite-delivery/indefinite-quantity contract for C-130J development, integration, retrofit and production activities for all C-130J variants. The contract provides flexibility to accommodate the broad enterprise of activities associated with the C-130J program.
The contract award does not mean that the company has been handed $15B in cash, but serves as a contract vehicle allowing the US Air Force to fund procurement and support items against that $15B IDIQ contract.
The C-130J is the newest version of the Hercules, which first flew in 1996, is used for military transport as well as air-to-air refueling missions, making it a highly-capable aircraft. Currently the US Air Force has 132 C130J aircraft in service with another 18 on order.
