L3Harris Lands $6B+ THAAD Propulsion Contract From Lockheed Martin: Here’s What Investors Need To Know

L3Harris is expanding its missile-defense manufacturing footprint, with the new THAAD award adding another major multi-year propulsion program to its portfolio.

• L3Harris will build a new facility for THAAD Solid Rocket Boost Motor production and expand capacity for Liquid Divert and Attitude Control systems.
• The announcement comes weeks after L3Harris received a $4.7 billion PAC-3 MSE propulsion contract from Lockheed Martin covering three key propulsion components.
• L3Harris said the latest THAAD award is consistent with its previously announced expectations, while the contract remains undefinitized.

L3Harris Technologies Inc. (LHX) said on Tuesday it received an undefinitized contract from Lockheed Martin(LMT) valued at more than $6 billion, excluding escalations, over seven years to significantly expand propulsion production for the Terminal High Altitude Area Defense (THAAD) system.

LHX and LMT stocks traded marginally lower at the time of writing on Tuesday.

L3Harris To Expand THAAD Propulsion Production

Under the agreement, L3Harris will construct a new facility to support increased manufacturing of THAAD Solid Rocket Boost Motors. The company will also expand capacity for THAAD’s Liquid Divert and Attitude Control production.

The award follows a framework agreement announced in July with the Department of War and Lockheed Martin to quadruple THAAD propulsion production. L3Harris said the latest award is consistent with its previously announced expectations for the program.

“This contract underscores L3Harris’ demonstrated ability to quickly deliver critical defense technologies at the scale and speed required by the Department of War,” said Ken Bedingfield, president of Missile Solutions at L3Harris.

Bedingfield also said planned facility expansions and ongoing investments across L3Harris’ propulsion portfolio will support the company’s ability to meet production requirements.

THAAD Contract Follows $4.7B PAC-3 Award

The THAAD contract comes after L3Harris received a separate $4.7 billion, seven-year undefinitized contract from Lockheed Martin on Sept. 8 to produce propulsion systems for the PAC-3 Missile Segment Enhancement interceptor.

That contract covers the PAC-3 MSE’s two-pulse solid-rocket motor, Lethality Enhancer, and Attitude Control Motors. L3Harris said the PAC-3 MSE and THAAD propulsion awards are consistent with its previously announced expectations for both programs.

The company said THAAD has achieved a 100% intercept success rate in flight tests since production began. THAAD is designed to intercept short-, medium- and intermediate-range ballistic missile threats inside and outside Earth’s atmosphere.

Bedingfield said L3Harris is “proud to partner with Lockheed Martin” to scale production of THAAD propulsion components and provide the system’s capabilities to warfighters.

Retail View ON LMT, LHX

On Stocktwits, retail sentiment around LMT shifted to ‘neutral’ over the past 24 hours, while sentiment around LHX remained in ‘bearish’ territory.

LHX shares have declined nearly 20% year-to-date, while LMT stock has gained more than 5% over the same period.

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