Please ensure Javascript is enabled for purposes of website accessibility

F-117 Fades to Black

By Rich Smith - Updated Apr 5, 2017 at 9:52PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

But for Lockheed the loss stops at sentiment.

And so it ends -- not with a bang but a whoosh.

The Associated Press reports that the U.S. Air Force will hold a "retirement party" for its groundbreaking F-117 Nighthawk fighter jet in April. The F-117 was dubbed the Stealth Fighter when it first entered service in 1981, alluding to its surreal angular shape that gave the plane radar-evading properties. It was the fictional star of Tom Clancy's novel, Red Storm Rising, and the real star of the air wars over Iraq and Serbia, Panama, and Kosovo.

But for all its technological prowess, the Stealth was not a huge commercial success for its builder, Lockheed Martin (NYSE: LMT). Over its 27-year history, fewer than five dozen of the planes were built, the last one nearly two decades ago. In fact, even the Stealth's technology became overblown. Because of the long lead-times required for building military aircraft, much of its technology dated from the 1970s.

Today, the low-tech Stealth has been relegated to the background by new tech, incorporated in the Lockheed / Northrop Grumman (NYSE: NOC) / BAE F-35 Lightning II, and the Lockheed / Boeing (NYSE: BA) / United Technologies (NYSE: UTX) F-22 Raptor, both of which claim "stealthy" status similar to the Nighthawk's.

Cue song, cue hankies
So much for the Nighthawk's wake. After the choruses of "Danny Boy" die down, what we really want to know is what this means for Lockheed's stock. Most likely, it won't cause much of a stir, but what import it does have is good.

You see, according to Wikipedia, each F-117 cost $122 million to build. Although affixing a sticker price to weapons systems is always tricky, if we take that number at face value, it would follow that Lockheed took in about $7.2 billion in revenue over the life of the F-117 program.

That's a decent chunk of change if taken all at once, but spread over the course of the F-117's lifespan, it amounts to just a quarter-bil of annual revenues for Lockheed. Pretty piddling stuff for what's now a $42 billion-per-year revenue giant. Plus, Lockheed built the last F-117 in 1990.

What's important now is that with the F-117 out of service, the Air Force will need Lockheed's Raptors and Lightning IIs more than ever. And with those two programs projected to cost tens of billions each, getting the F-117 cleared out of the way opens the runway to flocks of Raptors and Lightnings. To me, this seems a net positive for Lockheed.

Make the Fool your primary resource for investing generally and for defense investing in particular. See also:

Fool contributor Rich Smith does not own shares of any company named above. At The Motley Fool, we have a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Lockheed Martin Corporation Stock Quote
Lockheed Martin Corporation
LMT
$434.24 (1.26%) $5.39
The Boeing Company Stock Quote
The Boeing Company
BA
$169.99 (1.26%) $2.11
Raytheon Technologies Corporation Stock Quote
Raytheon Technologies Corporation
RTX
$95.01 (2.00%) $1.86
Northrop Grumman Corporation Stock Quote
Northrop Grumman Corporation
NOC
$479.58 (1.97%) $9.27

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/14/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.