Lockheed Martin awarded $110.9M Navy contract modification
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16 hours ago
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The U.S. Air Force Just Ordered $7.8 Billion in New Missiles, and These 2 Defense Contractors Will Profit
Key Points The U.S. Air Force placed a seven-year supply order for $4.3 billion worth of JASSM and LRASM missiles with Lockheed Martin. The Air Force also ordered six years' worth of AMRAAM missiles from RTX for $3.5 billion. RTX will probably earn a lot more profit on its missiles than Lockheed will. 10 stocks we like better than RTX › "A billion here, a billion there, and pretty soon you're talking real money." -- Senator Everett Dirksen The honorable senator from Illinois went down in the history books with this famous quip about government spending -- which is nowhere truer than in the defense department, where billion-dollar paydays pop up with regularity. Still, when I took a look at the list of Pentagon contracts published on July 31 in particular, I admit my eyes did goggle a little. In just two announcements amounting to fewer than 600 words total, the U.S. government awarded Lockheed Martin (NYSE: LMT) and RTX Corporation (NYSE: RTX) just under $7.8 billion. Big news for LockMart and RTX Both contracts concern the ordering of missiles for the United States Air Force. Lockheed Martin's Missiles and Fire Control division got the larger order: $4.3 billion to upsize a previous contract instructing Lockheed to build and deliver Joint Air-To-Surface Standoff Missiles (JASSM) and Long-Range, Anti-Ship Missiles (LRASM) for use by the USAF and foreign allies Finland, Japan, the Netherlands, and Poland by Jan. 31, 2033. RTX's Raytheon military products division was awarded $3.5 billion to supply Advanced Medium Range Air-to-Air Missiles (AMRAAM) by fiscal third-quarter 2031. In addition to the U.S. Air Force, these missiles are destined for the air forces of a huge host of U.S. allies, covering almost the entire alphabet: Australia, Belgium, Canada, Denmark, Finland, Germany, Hungary, Israel, Japan, Kuwait, Lithuania, the Netherlands, Poland, Spain, Sweden, Switzerland, Taiwan, Ukraine, and the United Kingdom. How to put big numbers in context Are you impressed yet? Well, before getting too excited about the large numbers being bandied about, make sure to note the completion dates for both contracts. Lockheed Martin's LRASM/JASSM sales, for example, run through early 2033. That means you need to spread out the $4.3 billion contract value over more than seven years to get a sense of how much annual revenue this contract will contribute, and whether it's enough to "move the needle" on Lockheed stock. Here's the answer: It bumps up Lockheed Martin's $71 billion-a-year revenue stream to perhaps $71.7 million -- an increase of less than 1%. Similarly, RTX's $3.5 billion win spreads across six years. That works out to less than $600 million a year in extra orders. On RTX's $84 billion revenue stream, it's an increase of at most 0.7%. Plus, bear in mind that the Pentagon was already buying missiles from both these companies. The new orders -- in large part -- will simply replenish backlog and continue revenues that LockMart and RTX were already collecting. Viewed in that context, it's entirely possible that the ongoing increase in annual revenue for each company will be less than 1%... or even less than 0.7%. What this means for investors All this said, and the caveats notwithstanding, we're still "talking real money" here -- even if it's not necessarily "move the needle" amounts of money. What's surprising to me is how much better RTX has been lately at turning revenue money into GAAP profits. According to data from S&P Global Market Intelligence, Lockheed Martin's operating profit margin in its Missiles and Fire Control division is currently an anemic 4.2%, making it by far the least profitable of Lockheed's four main business divisions. RTX's Raytheon division, in contrast, earns 9.7% operating margins on its sales -- twice Lockheed MFC's margin. This makes Raytheon RTX's second most profitable business division after airplane parts division Collins Aerospace, despite Raytheon being the company's smallest division by revenue. Strange as it may sound, while RTX won the smaller of the two (still very large) missile contracts last week, measured both by absolute value and by value as a percentage of total sales, RTX is almost certain to earn the most profit from its Pentagon contract. There's a reason why RTX stock sells for 2.5 times annual sales, while Lockheed stock is valued relatively less, at just 1.4x sales. And RTX's superior profit margin is that reason. Should you buy stock in RTX right now? Before you buy stock in RTX, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and RTX wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $663,630!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,115,695!* Now, it's worth noting Stock Advisor's total average return is 1,071% — a market-crushing outperformance compared to 185% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 13, 2025 Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Lockheed Martin and RTX. The Motley Fool has a disclosure policy. The U.S. Air Force Just Ordered $7.8 Billion in New Missiles, and These 2 Defense Contractors Will Profit was originally published by The Motley Fool
Yahoo
a day ago
- Yahoo
Lockheed Secures a $720M Contract for JAGM & Hellfire Missiles
Lockheed Martin Corporation (LMT) recently secured a modification contract valued at $720.1 million to produce Joint Air-to-Ground Missiles (JAGM) and Hellfire missiles. The work related to this deal will be carried out in Ocala, FL, and is projected to be completed by Sept. 30, 2028. The award has been provided by the U.S. Army Contracting Command, Redstone Arsenal, AL. What's Favoring LMT Stock? With countries worldwide enhancing their defense capabilities, spending on advanced military arms and ammunition has been rapidly increasing. This also includes growing investments in missiles and missile systems, which are crucial for warfare missions. Lockheed, as a prominent manufacturer of missiles and missile defense systems, has thus been witnessing a steady flow of orders from the Pentagon and other U.S. allies. The latest contract win is an example of that. Notably, LMT Hellfire is a multipurpose missile capable of defeating a broad target set. On the other hand, JAGM is a next-generation missile that combines the capabilities of LMT's Hellfire and LONGBOW missiles into one system, providing multi-domain combat solutions. The aforementioned missiles' viability in the defense industry ushers in solid order flow for Lockheed, like the latest one, further reflecting the solid demand that they boast in the missile market. LMT Stock's Growth Prospects Rising military conflicts, terrorism and border disputes have led nations to increase their focus on national security, particularly on missile defense systems, backed by the rapid development of advanced missile technologies over the last decade. This is likely to have prompted Mordor Intelligence to forecast a compound annual growth rate of 5% for the missiles and missile defense systems market during the 2025-2030 time period. This should benefit Lockheed, with its Missile and Fire Control unit being a recognized developer of high-performance missiles. The unit pursues business in more than 50 countries worldwide. Some of its major programs are the Patriot Advanced Capability-3 and Terminal High Altitude Area Defense air and missile defense programs as well. Its prominent missiles include the Precision Strike Missile and the Long Range AntiShip Missile. Prospects of LMT's Peers Other defense companies that are likely to enjoy the perks of the expanding missiles and missile system market have been discussed below. Northrop Grumman Corporation (NOC): Northrop Grumman provides high-speed, long-range strike weapons like the AARGM-ER, which is a supersonic, air-launched tactical missile system. It also develops and builds advanced missile defense technology, ranging from command systems to directed energy weapons, advanced munitions and powerful sensors. RTX Corporation (RTX): It is known for its missile defense systems like the Patriot and SM-6, which are in high demand globally. RTX also provides advanced sensors and interceptors to identify, track and defeat threats as part of a layered missile defense. The Boeing Company (BA): It manufactures various missile defense systems, including the Ground-based Midcourse Defense, Aegis Ballistic Missile Defense and Avenger. Boeing-built and supported air and missile defense systems have been protecting its customers for nearly 25 years against threats ranging from intercontinental ballistic missiles to hostile aircraft. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Boeing Company (BA) : Free Stock Analysis Report Lockheed Martin Corporation (LMT) : Free Stock Analysis Report Northrop Grumman Corporation (NOC) : Free Stock Analysis Report RTX Corporation (RTX) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
a day ago
- Business Insider
Lockheed Martin awarded $110.9M Navy contract modification
Lockheed Martin (LMT) was awarded a $110.9M cost-plus-fixed fee modification to a previously awarded contract for Trident II missile production and deployed systems support. Work is expected to be completed Sept. 30, 2029. The maximum dollar value of the contract action is $110.9M. This contract is being awarded to the contractor on a sole source basis under 10 U.S. Code 3204 and was previously synopsized on the Systems for Award Management website, with one proposal received. Strategic Systems Programs, Washington, D.C., is the contracting activity. The information contained in the announcement is unclassified. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
