Lockheed Hellfire Missiles For UAE Get State Department Nod

The U.S. Defense Security Cooperation Agency (“DSCA”) announced that the U.S. State Department has approved the United Arab Emirates’ (“UAE”) proposal to buy Lockheed Martin Corp.’s (NYSE:LMT) Hellfire Missiles.

The approval covers the sale of 4000 AGM-114 R/K Hellfire Category III air-to-surface missiles as well as related equipment, training and support. The transaction has an estimated price of $476 million.

Lockheed Martin’s business unit, Lockheed Martin Missile and Fire Control in Dallas, TX, will be the prime contractor. The company will deliver the missiles in increments of 1,000 to 1,500 over the next three years.

The Congress was notified of the potential sale by the DSCA on May 11, 2016.

According to the DSCA, "This proposed sale will enhance the foreign policy and national security of the U.S. by helping to improve the security of a partner country, which has been, and continues to be, an important force for political stability and economic progress in the Middle East."

AGM-114 Hellfire is an air-to-surface missile that was initially developed for anti-armor use. Later, these missiles were upgraded for precision strikes against other target types. It has multi-mission, multi-target precision-strike capability, and can be launched from air, sea and ground platforms.

Lockheed Martin is the largest U.S. defense contractor with a platform-centric focus that guarantees a steady inflow of follow-on orders from the Army, Air Force, Navy and IT programs.

A world fraught with geopolitical tensions has led to various nations ramping up their defense capabilities. Increasing threats and a growing need to safeguard the interests of nations and their people have pushed up demand for U.S. weapons. This has, in turn, been benefiting U.S. defense manufacturers.

Lockheed Martin currently has a Zacks Rank #2 (Buy).

Other Stocks to Consider

Other favorably placed stocks in the aerospace and defense space include Engility Holdings, Inc. (NYSE:EGL) , BAE Systems (LON:BAES) plc (OTC:BAESY) and CAE Inc. (TO:CAE) , each carrying the same rank as Lockheed Martin.


LOCKHEED MARTIN (LMT): Free Stock Analysis Report

BAE SYSTEMS-ADR (BAESY): Free Stock Analysis Report

CAE INC (CAE): Free Stock Analysis Report

ENGILITY HLDGS (EGL): Free Stock Analysis Report

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