Ever since January, word has been floating around about a sizable defense contract that Lockheed Martin (NYSE:LMT) had apparently secured to sell missiles to a mysterious Mideast government buyer. A little more than a month ago, the Pentagon confirmed the size of the sale ($308 million) and the customer (Kuwait). This morning, Lockheed Martin itself revealed the rest of the details.
Lockheed Martin confirmed that it has received a $308 million "modification" to a contract signed with the U.S. Army Aviation and Missile Command for the sale of missiles to Kuwait. Lockheed Martin will be selling 244 "hit-to-kill" Patriot Advanced Capability (PAC-3) Patriot air defense missiles, plus 72 launcher modification kits, related equipment, and program management services. This will be Lockheed's first sale of the PAC-3 Patriot variant to Kuwait, which becomes Lockheed's sixth international customer for the missile.
Other foreign buyers of the PAC-3 include Germany, Japan, the Netherlands, Taiwan, and the United Arab Emirates.
The mix of equipment complicates assigning the missiles an exact per-unit price. However, spreading the contract amount over just the 244 missiles themselves results in an implied per-unit price of $1.26 million per Patriot -- a price significantly below the $2 million to $3 million apiece that Patriots are commonly believed to cost.