Defense inventory review: NOC, LMT win orders, LHX reorganizes segments – January 4, 2022

Over the past week, a generous flow of Pentagon contracts has likely kept the major defense contractors buoyant. As a result, major defense stock indices have finished in the green over the past five trading days. The S&P 500 Aerospace & Defense (Industry) index rose 0.8%, while the Dow Jones US Aerospace & Defense index rose 0.7% during the aforementioned period.

Among the highlights of the past week, the defense majors namely Northrop Grumman (CNO Free report), Lockheed Martin Corp. (LMT Free report), The Boeing Company (BA Free report) and Raytheon Technologies Corp. (RTX Free Report) got some notable deals during the Defense Department’s daily fundraising session. What’s more, L3Harris Technologies (LHX Free Report) announced the reorganization of its business sector.

Recap of Important Stories from Last Week

1. Northrop GrummanThe business unit of Northrop Grumman Systems Corp. was awarded a hybrid contract for low rate initial production and full rate production of the Integrated Combat Command System. The award was presented by the US Army Contracting Command, Redstone Arsenal, AL.

Valued at $ 1.38 billion, the contract is expected to be completed by December 22, 2026 (read more: Northrop unit wins $ 1.4 billion contract to manufacture IBCS) .

2. LockheedThe Aerospace business unit was awarded a modification contract to provide logistical support activities to the F-35 Lightning II Joint Strike Fighter jets. The agreement was awarded by Naval Air Systems Command, Patuxent River, MD.

Worth $ 492.7 million, the contract is expected to be completed by December 2022 (read more: Lockheed Martin wins $ 492.7 million modification contract).

Lockheed Martin’s business line Missiles and Fire Control (MFC) was awarded a contract for the performance-based logistics program of the modernized night vision sensor / target acquisition detection pilot (M-TADS / PNVS) for the Apache gunship. The award was presented by the US Army Contracting Command, Redstone Arsenal, AL.

Worth $ 102.4 million, the contract is expected to be completed by July 31, 2024 (read more: Lockheed wins $ 102 million deal to support Apache Helicopter).

3. Boeing landed a contract to support the modification of the F-15MJ aircraft for the Japanese Air Self-Defense Force. The award was presented by the Air Force Life Cycle Management Center, Wright-Patterson Air Force Base, OH.

Worth $ 471.3 million, the contract is expected to be completed by December 31, 2028. Work on the deal will be performed in St. Louis, MO. $ 471 million to modify Japan’s F-15 jets).

4. Raytheon was awarded a modification contract for the manufacture and delivery of five new generation Mid-Band Jammers (NGJ-MB). The award was presented by Naval Air Systems Command, Patuxent River, MD.

Valued at $ 226.7 million, the contract is expected to be completed by September 2024. The majority of work related to this agreement will be carried out in Forest, MS (read more: Raytheon wins $ 227 million deal dollars to build a next-generation jammer).

5. L3Harris revealed that it is implementing a new alignment and organization of its core businesses. As a result, the company will now have three segments, as opposed to its previous four segments, which are integrated mission systems, space and airborne systems, and communications systems.

Such reorganizations should allow L3Harris to offer more advanced technological solutions, thus strengthening its position in the defense space.

Performance

Over the past five trading days, the defense greats have put on a solid show with the exception of Textron. Boeing gained the most, with shares rising 2.3%, followed by Raytheon.

The industry’s performance over the past six months has been mixed. While Lockheed, Boeing and Raytheon lost, Northrop and Textron won.

The following table shows the evolution of the prices of the main defense players over the last five trading days and over the last six months.

Society Last week Last 6 months
LMT 0.06% -7.11%
BA 2.31% -14.94%
DG 0.16% 10.04%
RTX 2.03% -0.74%
CNO 0.34% 4.42%
SMS -0.84% 11.82%
LHX 0.59% -3.59%

About Barbara J. Ross

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