Lockheed-Sikorsky JV Wins $2B H-60 Aircraft Support Deal - Analyst Blog

Zacks Equity Research
Updated

Maritime Helicopter Support Co. (“MHSCo”), a joint venture (“JV”) between Lockheed Martin Corp. LMT and Sikorsky Aircraft Corp., a subsidiary of United Technologies Corp. UTX, has been awarded a $2 billion contract by the U.S. Navy for the support of the H-60 aircraft.

The fixed-price, performance-based logistics contract encompasses requirements for 1710 assemblies and parts to service the H-60 aircraft. Moreover, per the contract, the JV will provide services including repair, modification, overhaul and replacement of hardware in addition to manufacturing of new material for the aircraft.
 
The contract work is expected to be over by Jan 31, 2020.

Formed in 2001, MHSCo engages in providing repair, maintenance and overhaul services on the Navy’s H-60 series aircraft. The H-60 Performance-Based Logistics program comprises of a compensation plan, whereby MHSCo’s compensation will be based on the total flight hours of the helicopter. This ensures MHSCo’s consistent endeavors to enhance the reliability of its fleet. This will not only reduce costs for the Navy but also ascertain improved performance by the helicopters.

Additionally, the $1.1 trillion defense spending bill for fiscal 2015 includes $368 million for the Presidential Helicopter Replacement program, which will likely be a major benefit for the Lockheed-Sikorsky team, as it had initially won the contract to build the first unit of the latest presidential helicopters fleet.

Lockheed currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the same sector include Northrop Grumman Corp. NOC and Huntington Ingalls Industries, Inc. HII, each carrying a Zacks Rank #2 (Buy).


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
UTD TECHS CORP (UTX): Free Stock Analysis Report
 
LOCKHEED MARTIN (LMT): Free Stock Analysis Report
 
NORTHROP GRUMMN (NOC): Free Stock Analysis Report
 
HUNTINGTON INGL (HII): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research