NOC - Lockheed and Northrop win $1.5 billion worth of Pentagon contracts

2023-08-21 13:55:15 ET

Pentagon just awarded contracts worth $1.5 billion to Lockheed Martin Corp (NYSE: LMT) and Northrop Grumman Corp (NYSE: NOC). Shares of both companies are in the green at writing.

Lockheed and Northrop to make prototype satellites

The Space Development Agency of the United States has selected Lockheed and Northrop to design and build prototype communications satellites for its Tranche 2 Transport Layer Beta (T2TL Beta).

It had received six proposals in total for the said contract. Joe Rickers – a Vice President at Lockheed Martin said today in a press release :

Lockheed’s strategic partnerships with a network of suppliers and small businesses will ensure we’re aligned with SDA’s strategy for accelerated delivery.

Both companies have been tasked to make 36 of the said satellites each for the Space Development Agency that expects to start launching them by September of 2026.

U.S. wants to expand its footprint in space technology

Today’s announcement reiterates that the U.S. is fully committed to growing its capabilities against China in domains that have national security implications. The Space Force has requested a total of $30 billion in budget for fiscal 2024.

Northrop’s contract with the Pentagon’s space arm is worth $733 million. According to its VP of Communication Systems :

With Northrop Grumman’s extensive military satellite communication experience and deep mission understanding, we are helping SDA make its vision a reality.

Northrop Grumman reported better-than-expected financial results for its second quarter in July. Its shares are still down about 20% versus the start of 2023.

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