Lockheed Martin Secures Contract for Submarine Program Support

Lockheed Martin Corp. (NYSE:LMT) has recently secured a contract to provide a submarine electronic warfare system, along with modernization kits, equipment, and installation services. The Naval Sea Systems Command in Washington, D.C. awarded the contract.

Valued at $27.1 million, the contract is slated for completion by May 2026. Work under this contract will take place in Syracuse, NY.

Lockheed’s Position in the Submarine Market

With escalating geopolitical tensions worldwide, nations are ramping up their defense capabilities to safeguard their borders against potential threats. Submarines play a crucial role in enhancing a nation’s underwater warfare capabilities, leading to increased demand for submarine construction and related developments globally. This trend has been advantageous for defense giants like Lockheed Martin.

Lockheed boasts extensive experience, spanning over 40 years, in designing, developing, and integrating submarine combat systems for eight countries worldwide, including the United States, United Kingdom, Canada, Brazil, and Spain. Notably, the company has introduced the Submarine Warfare Federated Tactical System (SWFTS), an engineering and management program encompassing various submarine combat subsystems such as sonar, radar, communications, and weapon control.

The recent contract win further underscores Lockheed’s significance in the submarine market, with expectations of contributing to its revenue growth in the future.

Growth Prospects

Factors such as nuclear deterrence, technological advancements in submarines, and geopolitical tensions are driving a substantial increase in submarine procurement globally. Mordor Intelligence forecasts a compound annual growth rate (CAGR) of over 4% for the global submarine market during the period 2024-2029.

This growth trajectory presents ample opportunities for Lockheed Martin, as well as other defense majors including BAE Systems (BAESY), General Dynamics (GD), and Huntington Ingalls Industries (HII).

BAE Systems specializes in designing, building, testing, and commissioning advanced submarines for the Royal Navy, along with state-of-the-art combat systems and equipment. The company’s Astute class submarines are renowned for their capabilities, capable of striking targets with precision from significant distances.

General Dynamics’ Electric Boat unit has a rich history in submarine manufacturing, dating back to 1899 with the USS Holland. The company continues to be a prominent player in the sector, with a positive long-term earnings growth rate.

Huntington Ingalls’ Newport News Shipbuilding is a key player in the design and construction of nuclear-powered submarines for the U.S. Navy, offering fleet services worldwide.