Lockheed Martin (LMT 0.27%) finalized its $9 billion purchase of Sikorsky helicopters from United Technologies (RTX 0.82%) in November of last year. No sooner had it done so, though, than a new red flag popped up on Lockheed's annual report:

If you own Lockheed Martin stock, the Sikorsky deal could cost you money.


Sikorsky's Black Hawk helicopter is the most popular combat helo on the planet. Image source: Lockheed Martin.

Caveat emptor
I paraphrase, of course. But here, see for yourself what Lockheed said in spelling out its risk factors:

The acquired Sikorsky business may underperform relative to our expectations, the transaction may cause our financial results to differ from our expectations ... and we may not be able to achieve anticipated cost savings or other anticipated synergies.

Lockheed went on to warn that integrating Sikorsky into Lockheed's business will be a "complex, costly and time-consuming" affair. What's more, even after integrated:

Sikorsky also may not perform as expected, or demand for its products may be adversely affected by global economic conditions, including oil and gas trends that are outside of its control. The acquisition could also cause disruptions in our and Sikorsky's business, including potential adverse reactions or changes to business relationships and competitive responses.

Topping it all off, Lockheed also raised the worry that in the process of becoming a bigger defense contractor, it may have made itself a bigger target for Congressional budget cutters -- or for Pentagon acquisition specialists who have "expressed concerns regarding greater consolidation in the defense industry" and may decide to "preserve diversity at the prime contract level."

Translation: Even if Lockheed Martin has better products, and better prices, the Pentagon may give contracts to rivals such as Boeing (which builds the Apache helicopter) or Textron (which owns Bell), just to preserve balance in the defense industry.

That would not be good news for Lockheed Martin -- at all.

Minuses, and pluses, too
If the risks to acquiring Sikorsky were so big, though, an investor might wonder why Lockheed Martin bothered to buy it at all? The answer is simple: The opportunities are even bigger than the risks.

Remember: Lockheed Martin paid $9 billion for Sikorsky. But according to Lockheed's 10-K filing with the SEC, Sikorsky brought with it $15.6 billion in backlogged business. That's a huge amount of business already "in the bag" for Lockheed Martin. And it doesn't even count the opportunities on the horizon, such as Turkey's plan to buy as much as $20 billion worth of Sikorsky helicopters as it upgrades its air forces. And call me a crazy optimist, but I suspect Turkey doesn't give a fig whether it's buying those helos from United Technologies subsidiary Sikorsky or Lockheed Martin subsidiary Sikorsky.

As long as the helicopters fly right and cost right, Turkey will be happy.

The upshot for investors
Will all of Lockheed Martin's hopes and dreams for Sikorsky come true, and the deal turn out to be as profitable as it promised when "selling" the deal to its shareholders? Of course not.

Facts change. For example, already, the downturn in the oil market is costing Sikorsky sales among oil production companies -- and synergies from such deals almost never materialize as promised. But other opportunities will emerge. And with Lockheed Martin now the biggest name in fighter jets, in transport aircraft, and finally in helicopters, too, I think this deal is going to work out for investors just fine.

That said, if a little bit of pessimistic talk about Lockheed Martin's chances helps to scare down Lockheed Martin stock from its current high perch of 19 times earnings -- and make the stock a bit cheaper to buy -- I for one wouldn't mind at all.