Lockheed Wins a Contract for HH-60M Black Hawk Helicopters

Lockheed Martin Corp.'s LMT business unit, Sikorsky, recently secured a modification contract for HH-60M Black Hawk helicopters. The award has been provided by the Army Contracting Command, Redstone Arsenal, AL. 

Valued at $52.2 million, the contract is expected to be completed by Jun 30, 2027. Work related to this contract will be carried out in Stratford, CT.

Black Hawk and Lockheed

Lockheed has strengthened its position as one of the forerunners in the military helicopter market, driven by continuous advancements in its combat-proven helicopters, backed by growing demand for more agile and lethal defense products. 

Notably, the Unites States and other 34 nations' reliance on Lockheed's Black Hawk multirole helicopters underscores the company's prominence in the combat helicopter space. This can be gauged from the fact that currently, more than 4,000 Black Hawk helicopters of various types are in service worldwide.

These helicopters are equipped with state-of-the-art digital avionics, robust GE engines and resilient airframe structures. Additionally, the inclusion of composite wide-chord rotor blades enhances the BLACK HAWK's survivability, situational awareness and overall performance.

Lockheed's commitment to innovation is further exemplified by the UH-60M, the latest iteration of the BLACK HAWK family. This model is superior in every aspect, offering greater payload capacity, extended range and improved handling. The advanced digital avionics suite integrated into the UH-60M significantly boosts situational awareness and interoperability, which are vital for modern combat scenarios. The helicopter also features active vibration control and enhanced survivability, making it more capable and reliable than its predecessors.

Lockheed's focus on integrating advanced features into its helicopters has resulted in a steady stream of orders, as demonstrated by recent contract wins, including the latest one. This, in turn, is expected to drive continued revenue growth for Lockheed's Sikorsky business unit, ensuring the company's prominence in the combat helicopter market in the future.

LMT's Growth Opportunities

Recent advancements and the integration of new tactical, logistical and essential features have significantly boosted the prominence and demand for U.S. military helicopters. As one of the leading manufacturers in the combat helicopter industry, Lockheed is well-positioned to capitalize on this trend, with its portfolio containing combat-proven programs like Black Hawk, MH-60R Seahawk, HH-60W Combat Rescue, CH-148 Cyclone, S-97 Raider and CH-53K King Stallion heavy-lift helicopters. The recent contract award is a decent example of this continued success.

Looking ahead, rising geopolitical tensions and cross-border conflicts are prompting nations to increase defense spending on new aircraft and helicopters to enhance their aerial capabilities. According to a report by the Mordor Intelligence firm, the military helicopter market is projected to witness a compound annual growth rate (CAGR) of 2.9% between 2024 and 2030.

Prospects for Peers

Other defense companies that should enjoy the perks of the expanding military helicopter market have been discussed below.

Boeing BA: The company's helicopters are renowned for their leading-edge, ready and relevant solutions that deliver proven capabilities. Boeing's product portfolio includes combat helicopters and rotorcraft like the CH-47 Chinook, AH-64 Apache, AH-6 Little Bird and V-22 Osprey.

Boeing has a long-term (three to five years) earnings growth rate of 21.3%. The Zacks Consensus Estimate for BA's third-quarter 2024 sales indicates an improvement of 10.8% from the prior-year quarter's reported figure.

Airbus Group EADSY: It is one of the world's largest suppliers of advanced military helicopters. Its product portfolio includes the H135 combat helicopter, the H145M helicopter, the AS565 MBe Panther, H160M, H175M, H215M, H225M and a few more.

Airbus' long-term earnings growth rate is 13.9%. The consensus estimate for EADSY's 2024 sales indicates an improvement of 7.2% from the 2023 reported figure.

Textron TXT: Its Bell unit is one of the leading suppliers of helicopters to the U.S. government. In association with Boeing, this unit is the only supplier of military tiltrotor aircraft. Some of TXT's key programs are AH-1Z helicopter, V-22 tiltrotor, V-247 and V280 aircraft.

Textron boasts a long-term earnings growth rate of 10.1%. The Zacks Consensus Estimate for TXT's 2024 sales indicates an improvement of 5.6% from the 2023 reported figure.

Price Movement

In the past year, shares of Lockheed have surged 22.7% against the industry's decline of 1.4%.

Image Source: Zacks Investment Research

Zacks Rank

Lockheed currently carries a Zacks Rank #3 (Hold).

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