Lockheed Martin Aeronautics, a unit of Lockheed Martin Corporation LMT, has been awarded a $520.4 million contract modification by the U.S. Air Force to produce the F-16 Viper Shield electronic warfare suite.
What Happened: The contract modification, a fixed-price incentive, allows the contractor to commence production tasks. The total cumulative face value of the contract now stands at $897.4 million, according to a press release from the U.S. Department of Defense on Tuesday.
The work is expected to be completed by June 2028 and will be carried out in Fort Worth, Texas. The modification includes foreign military sales to the airforces of Bahrain, Bulgaria, Morocco, the Slovak Republic, and Taiwan.
Earlier in June, China imposed sanctions on several Lockheed Martin subsidiaries and senior executives in response to U.S. arms sales to Taiwan. The sanctions included freezing the assets of Lockheed Martin’s senior executives, including Chairman James Donald Taiclet, and banning their entry into China.
Why It Matters: The F-16 Viper Shield electronic warfare suite is a crucial component for the foreign military sales of the F-16 aircraft. This contract modification is a significant development for Lockheed Martin, given the recent geopolitical tensions and the company’s role in supplying defense equipment to countries like Taiwan.
The Biden administration recently lifted restrictions on Ukraine using U.S.-supplied weapons for offensive operations inside Russian territory, marking a significant shift in U.S. strategy as the conflict between Ukraine and Russia intensifies. This policy change has led to a rise in defense stocks, including Lockheed Martin.
Earlier this year, Lockheed Martin reported its first-quarter revenues and earnings ahead of expectations, despite ongoing concerns about margins. Analyst Noah Poponak reiterated a Sell rating while raising the price target from $377 to $378, reflecting cautious optimism about the company’s financial health.
Price Action: Lockheed Martin Corp’s stock closed at $465.70 on Tuesday, down 0.16%. In after-hours trading, the stock remained unchanged. Year to date, the stock has gained 2.10%, according to data from Benzinga Pro.
Read Next:
Photo courtesy: Lockheed Martin
This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
