Lockheed Martin (NYSE:LMT) has bagged an order for four 360 degree situational awareness sail mounted sonar systems. These Low-Cost Conformal Array (LCCA) sonar systems will provide high-frequency sonar coverage above and behind the submarine. The contract is worth $13.1 M and has been provided by the officials of the Naval Sea Systems Command in Washington. Lockheed Martin is the largest defense contractor in the U.S., competing with companies like Boeing (NYSE:BA) and Raytheon. We have a revised price estimate of $87 for Lockheed Martin, which is roughly 3% below the current market price.
The U.S. Navy officials were looking for special submarine sonar systems that could enable submarine commanders to increase their tactical control while operating in shallow-water coastal areas and harbors as well as open-ocean areas. They found a solution from the Lockheed Martin Corp. Mission Systems & Sensors segment which is based in Liverpool, New York.
The sonar systems which will be provided by Lockheed Martin are designed to safely navigate among conventional and nuclear submarines and surface warships, apart from civil and commercial surface vessels by alerting submarine crews of short-range contacts. The contract is expected to be finished by 2013.
Electronic systems is the biggest division of the company, accounting for nearly 38% of the stock value. In this division, U.S. electronic systems account for 25% of the value while non U.S. electronic systems account for 13% of the value.