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Thursday Defense Contracts Top $980 Million

The Pentagon awarded $982 million in new defense contracts Thursday, handing out sizable contracts to several major defense contractors.

Among the publicly traded companies, the biggest winner was Exelis, now a subsidiary of Harris Corporation (NYSE: HRS). Exelis won a $97.3 million contract to supply the U.S. Navy with 46 AN/ALQ-214(V)4/5 integrated defensive electronic countermeasures -- onboard radio frequency jamming systems. These systems are used to protect Navy fighter aircraft such as the F/A-18 Hornet from hostile anti-aircraft missiles.

This contract, on which delivery is due in December 2017, is worth approximately 2% of Harris annual revenues, according to data from S&P Capital IQ. The stock is already up almost 15% year-to-date and as of this writing, was up another 1% on the deal announcement.

Another big winner for the day was Huntington Ingalls (NYSE: HII), which won a $93 million contract to pay for labor and the purchase of long lead-time materials needed for work it has been hired to do on Navy Ticonderoga-class guided missile cruisers.

And Lockheed Martin won more contracts (three in all) than any other single company Thursday:

  • $50.9 million to supply an unspecified number of modernized laser range finder designator (M-LRFD) kits to the U.S. Army
  • $24.9 million to do engineering and development work on AEGIS ship-defense systems for the new Australian Air Warfare Destroyer (AWD) shipbuilding program
  • and $8.4 million for additional work on the Navy's Integrated Common Processor program. This funding increase raises the value of Lockheed Martin's underlying ICP contract to $97.8 million

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Rich Smith has no position in any stocks mentioned.

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