Lockheed Martin Awarded Contract for Next-Gen GPS Satellites
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Our orbit's GPS satellites are set to get an upgrade, thanks to a $238 million contract Lockheed Martin (NYSE: LMT) received to produce our world's next-generation Global Positioning System (GPS) satellites. Known as GPS III, third-generation satellites built by Lockheed Martin will replace the aging existing GPS satellites to improve their capabilities for civilian, commercial, and military use.
Benefits of GPS III
Awarded by the U.S. Air Force, the contract will enable Lockheed to deliver satellites that have better accuracy, improved reliability, and anti-jamming capabilities to better meet current and future needs in many aspects of modern society.
The new GPS III satellites are expected to deliver satellite signals thrice more accurate than the current GPS satellite constellation, according to Lockheed Martin. The upgraded satellites are also expected to be more reliable in areas where the current, aging satellites are lacking: namely in heavily tree-lined areas, areas with crowded skyscrapers, thick cloud cover, and even indoors. The latter of which is welcome news for Google (NASDAQ: GOOG), which is working on applications for Google Maps for indoors. Google's Indoor Maps was recently expanded to business owners using trusted photographers in 14 cities ... so far.
Improved anti-jamming and anti-interference capabilities means less risk of intentional enemy attacks, and a safer society as a whole.
Lockheed Martin is one of the world's leading defense contractor, with net sales of 2011 of over $46 billion. In early 2012, Lockheed Martin announced a 1Q dividend of $1 per share. What's more, the stock is yielding 4.7 percent and is trading at roughly 10 times earnings. The stock closed at $85.25 yesterday, after a 52 week high and low of $85.40 and $66.36 respectively.
Lockheed has already built many of the GPS satellites currently in the GPS constellation today. And with the award of the primary contractor for the GPS III next-generation satellites, the team at Lockheed can maximize more efficiencies in satellite manufacturing, and improve its financial performance for investors.
Lockheed Martin is currently testing a next-gen GPS III satellite prototype at its Colorado-based facility, and the first of the upgraded satellites -- out of the 32 the Air Force wants to build -- should reach orbit in 2014.
This is all great news for Lockheed and its investors. But given the current state of the economy, there's still a slight caveat here: the concern of a defense spending cutback.
For our sake and Lockheed's, let's hope all these next-generation of GPS satellites get built and make it to space before any defense spending cuts come to fruition.
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