The Boeing Company (BA), Raytheon Company (RTN): How Lockheed Martin Corporation (LMT) Aims to Lock Up the Market for Army Helicopters

Similar struggles arise between Lockheed’s AN/AAQ-30 Target Sight System, used on the AH-1Z Cobra helicopter, and Northrop Grumman Corporation (NYSE:NOC)‘s AN/AAQ-37 system, used on Lockheed’s own F-35. In helmet displays, Lockheed must compete with Israel’s Elbit Systems Ltd. (USA) (NASDAQ:ESLT).

Meanwhile, if Lockheed appears to “own the future” in helo-borne rockets, thanks to its having won the Joint Air-to-Ground Missile contract, the JAGM still isn’t scheduled to even begin deployment for four more years. In the meantime, Lockheed Martin Corporation (NYSE:LMT) has to try to keep people buying its venerable Hellfire missile, and not, for example, Raytheon Company (NYSE:RTN)’s Maverick.

If Lockheed succeeds, this wouldn’t only benefit Lockheed. If MEP becomes the standard package for military helicopters, and Hellfire is incorporated into it, well, at last report, The Boeing Company (NYSE:BA) was still receiving “fee-per-missile” residuals from its prior investment in the Lockheed-Boeing Hellfire LLC joint venture.

As for Lockheed, ideally, the company would like to lock the military into using a package including TADS/PNVS, AN/AAQ-30, the Hellfire, and its other equipment for as long as possible. This would go a long way toward making Lockheed “invincible,” even in the face of defense budget cuts. Meanwhile, if the company succeeds in depriving its rivals of the ability to bid on contracts they might otherwise want … then companies like Raytheon Company (NYSE:RTN), Northrop Grumman Corporation (NYSE:NOC), and Elbit Systems Ltd. (USA) (NASDAQ:ESLT) could soon start to look “vulnerable” indeed.

The article How Lockheed Aims to Lock Up the Market for Army Helicopters originally appeared on Fool.com and is written by Rich Smith.

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of Lockheed Martin, Northrop Grumman, and Raytheon.

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