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Defense Stock Roundup: LMT, Bell-Boeing Win Deals, BA Reveals Q1 Delivery Numbers

Over the past week, the U.S. defense contractors witnessed only a handful of contract flows from the Pentagon, which might not have been enough to offer sufficient stimulus to their stock price. The U.S. stock market delivered a mixed performance as price hikes driven by stellar results of the big banks were offset by price lost by cryptocurrency and blockchain-related firms in the wake of Bitcoin’s slide.  

The broader market’s fluctuation can also be expected to have its impact on defense stocks. Consequently, major indices of the Aerospace-Defense space ended on not-a-very-encouraging note over the trailing five trading sessions. The S&P 500 Aerospace & Defense (Industry) index inched up 0.01%, while the Dow Jones U.S. Aerospace & Defense index rose 0.07% in the aforementioned time period.

Among the past week’s highlights, defense majors namely Lockheed Martin LMT, Bell-Boeing — a joint venture between Bell Helicopter from Textron TXT and Boeing BA — secured a number of notable deals from the Department of Defense’s daily funding session. Moreover, Boeing released its Q1 delivery figures while Teledyne TDY gave an update about its pending acquisition of FLIR Systems FLIR.

Recap of Past Week’s Important Stories

1.    Lockheed Martin clinched a modification contract worth $447.2 million for the production and delivery of 12 MH-60R aircraft, which will be supplied to the government of the Republic of Korea.  The deal has been awarded by the Naval Air Systems Command, Patuxent River, MD.

The contract is scheduled to be completed by December 2024. Majority of the work related to this deal will be executed in Owego, NY (read more: Lockheed Martin Wins $447M Deal to Build MH-60R Aircraft).

2.    Bell-Boeing secured a contract worth $143.2 million to provide the logistics and repair support for MV-22B, CMV-22 (Navy) and CV-22 (Air Force) Osprey components.  Work related to the deal is scheduled to be completed by December 2025.    

The contract was awarded by the Naval Supply Systems Command Weapon Systems Support, Philadelphia, PA (read more: Bell-Boeing Wins $143M Deal to Support V-22 Family of Jets).

3.    Boeing has revealed delivery figures for its commercial and defense operations for the first quarter of 2021. The figures reflects a 54% surge in commercial shipments from the first quarter of 2020. Defense shipments rose 7.7%.

Boeing reported commercial deliveries of 77 airplanes in first-quarter 2021 compared with 50 aircraft delivered in the first quarter of 2020. The rise in the year-over-year delivery figure could primarily be attributable to the return of the 737 MAX into service in November 2020, thus boosting the company’s first-quarter plane deliveries.

In its defense and space business, Boeing’s deliveries totaled 42 in first-quarter 2021, which witnessed a slight improvement from 39 dispatched in the prior-year period (read more: Boeing Reports Solid Q1 Commercial & Defense Deliveries).

4.    Teledyne has announced that it received antitrust clearance for the pending acquisition of FLIR Systems from regulatory authorities in Poland and South Korea. The company also declared that the U.S. Securities and Exchange Commission declared effective the Form S-4 Registration Statement concerning the pending acquisition of FLIR Systems. Both Teledyne and FLIR Systems have scheduled special meetings for each company's respective stockholders to approve matters related to the acquisition on May 13, 2021.

Performance

Over the past five trading sessions, the defense biggies put up a mixed show. While most of the stocks made improvement, Boeing and Raytheon Technologies RTX took a dip.

In the last six months, the industry's performance was impressive. Textron gained the most with 59.7% surge in share price, followed by Boeing.

The following table shows the price movement of the major defense players over the past five trading days and during the last six months.

CompanyPast WeekLast 6 Months
LMT0.99%1.37%
BA-1.66%48.30%
GD0.80%29.31%
RTX-0.09%26.67%
NOC1.91%9.55%
TXT0.27%59.72%
LHX1.25%20.85%

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FLIR Systems, Inc. (FLIR): Free Stock Analysis Report
 
The Boeing Company (BA): Get Free Report
 
Lockheed Martin Corporation (LMT): Get Free Report
 
Textron Inc. (TXT): Get Free Report
 
Teledyne Technologies Incorporated (TDY): Get Free Report
 
Raytheon Technologies Corporation (RTX): Get Free Report
 
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