Lockheed Martin Corp. (LMT) pocketed two contracts worth $417 million. The first is worth $318 million for providing services to an anti-explosives Army team in Iraq and Afghanistan. The contract was awarded by the U.S. Army Research Development and Engineering Command in Maryland. The second contract is worth $99.3 million for maintenance support of Army Apache helicopters sensors in 2010. The work will be done in Orlando and is expected to be completed by the end of fiscal 2010.

In recent times, Lockheed Martin has witnessed the cancellation of quite a few prominent programs such as the TSAT Mission Operations System (TMOS) contract, F-22 Raptor program and the VH-71 Presidential Helicopter (VH-71) program. Lockheed Martin’s high-cost platform programs were the prime targets of the Obama administration for budget cuts. The addition of $417 million would boost the beleaguered backlog of the company, which had shrunk to $76.4 billion after the first nine months of the fiscal 2009 from $80.9 billion at year-end fiscal 2008.

Lockheed Martin remains a key player within the aerospace & defense segment and mainly competes with Boeing Co. (BA), Northrop Grumman Corp. (NOC) and General Dynamics Corp. (GD). The company’s customer base includes the U.S. Government, foreign governments and other commercial buyers. Lockheed’s traditional defense focus appears strong, with increasing interest from domestic and international customers. In addition, management intends to explore strong business opportunities beyond the traditional defense market, specifically in the areas of civil, governmental and commercial space businesses.

Going forward, we believe Lockheed Martin has significant upside potential based on strong defense outlays throughout 2009–10, above-industry average return-on-invested-capital and expanding product lines. However, these are offset by risks related to key projects execution, fate of high cost platform programs, lower top-line results in the Aeronautics segment, higher pension liability and lower government satellite programs. We maintain our market Neutral recommendation on the shares.

Zacks Investment Research

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6. (LMT) Lockheed Martin Slashes JobsLockheed Martin Space Systems Co., one of the four key operating units of Lockheed Martin...

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