Lockheed Martin Secures Contract for F-35 Jet Program Support

Lockheed Martin’s (NYSE:LMT) Aeronautics division has recently secured a modification contract for its F-35 fighter aircraft from the Naval Air Systems Command in Patuxent River, MD.

Details of the Contract

The contract modification entails Lockheed providing non-recurring engineering and associated materials for the power thermal management system controller, as well as addressing diminishing manufacturing sources and material shortages for gun lube. This effort supports the F-35 Joint Strike Fighter jet program and is valued at $54.5 million. Completion of the contract is anticipated by January 2030.

The contracted work will take place in Fort Worth, TX, and will serve beneficiaries including the U.S. Navy, Air Force, Marine Corps, and non-Department of Defense participants.

Significance of F-35 for LMT

Lockheed holds a prominent position in the global military aircraft sector with its F-35 fleet, which offers advanced features making it a preferred choice for many nations. Continuous modernization efforts using advanced technologies to meet evolving warfare needs significantly drive demand.

The F-35 program has been a major revenue contributor to LMT’s Aeronautics business unit for several years, accounting for 26% of the company’s consolidated net sales in 2023.

As of December 31, 2023, Lockheed has delivered 9992 F-35 airplanes, with 373 jets in the backlog, indicating robust demand for the program in the military aircraft market.

Looking Forward

LMT aims to deliver 147-153 F-35 jets in 2024, with an estimated delivery of 156 jets for 2025 and beyond. Successful deliveries and contract wins like the recent one are expected to bolster the revenues of its Aeronautics segment in the coming years.

Growth Prospects

In light of increasing geopolitical tensions globally, nations are enhancing their defense capabilities, leading to a rise in demand for fighter jets. This trend is expected to drive growth in the global military aviation market, projected to witness a CAGR of 5.2% during the 2024-2030 period according to Mordor Intelligence.

Lockheed stands to benefit from this market expansion with its portfolio of combat-proven jets like the F-16 and F-22 fighter aircraft, in addition to the F-35 jets.

Other major players in the defense industry, including Northrop Grumman (NOC), Airbus Group (EADSY), and Textron (TXT), are also poised to capitalize on the growth opportunities in the military aviation market.