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On Monday, aerospace giant Lockheed Martin (NYSE: LMT ) confirmed receipt of two Air Force contracts worth a combined $120 million, whose award had earlier been announced in less detail on the Department of Defense's website.
Lockheed describes the two "Global Positioning System III" contracts, for the procurement of long-lead parts for the fifth, sixth, seventh, and eighth satellites, as part of a larger plan to "affordably replace aging GPS satellites while improving capability to meet the evolving demands of military, commercial, and civilian users." The company continued: "GPS III satellites will deliver better accuracy and improved anti-jamming power while enhancing the spacecraft's design life and adding a new civil signal designed to be interoperable with international global navigation satellite systems."
So far, Lockheed has won contracts to produce the first four GPS III satellites, and its award of funds to begin buying parts needed to put together the next batch of four satellites argues strongly in favor of its ability to win funds to complete those as well. Farther down the road, the Air Force eventually wants to put a constellation of 32 GPS III satellites in orbit, so even after this batch is done, the company will still have twice as much revenue awaiting in future years, as it's already collected, or begun to collect, on the first few satellites of the group.
Lockheed shares edged down in Monday trading, slipping 0.3% to close at $87.88.