Lockheed Martin Corp. (LMT) is gearing up big-time to rejuvenate its beleaguered Space Systems segment. Yesterday, the company broke ground on two new projects at its facility in Newtown, Pennsylvania. The estimated cost of the two projects will come to around $24 million.

Lockheed Martin Space Systems Co. (LMSSC) is a major operating unit of Lockheed Martin’s Space Systems segment. LMSSC designs and develops, tests, manufactures and operates a full spectrum of advanced-technology systems for national security and military, civil government and commercial customers.

The Newtown facility is the headquarters for LMSSC, besides the next-generation Global Positioning System (GPS) III and Geostationary Operational Environmental Satellite R-Series (GOES-R) programs. With the recent award of GOES-R program in July 2009, the need for an extension was vital. The facility also produces components for programs such as the Advanced Extremely High Frequency (AEHF) system and the Mobile User Objective System (MUOS).

The first project is a 15,000 square foot multi-purpose conference center for 250 people enabling smoother communication with its geographically diversified customers, both government and commercial.

The second project is a 17,000 square foot extension to the Product Team Building. The extension will house a near-field antenna range, a new passive inter-modulation (PIM) chamber, and a new antenna assembly clean room. This extension will facilitate the assembly, integration and test of essential GPS III components.

The move is expected to perk up the beleaguered Space Systems segment where net sales decreased by 3% in the first half of fiscal 2009 year over year. The segment reported lower results due to falling volumes in Orion, the Space Shuttle’s external tank and defensive missile programs. However, the segment witnessed higher traffic in the Government satellite and Strategic missile programs. We maintain our Neutral recommendation on Lockheed Martin.

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