Lockheed Martin Aeronautics Company, a key division of Lockheed Martin Corporation, received a modification contract worth $122.1 million from the U.S. Department of Defense (DoD). This latest contract entailed the procurement of initial aircraft spares for the F-35 Lightning II Joint Strike Fighter (JSF) aircraft for the U.S. Marine Corps, U.S. Air Force, U.S. Navy and other international partners. Work under this contract is scheduled to complete by Dec 2016. Development costs for the highly advanced and expensive F-35 JSF program are shared by the U.S. and its allies. As of Dec 31, 2013, the total estimated acquisition cost (the sum of development, procurement, and military construction costs) of the F-35 program was estimated at $323.5 billion. The fiscal 2014 U.S. defense authorization bill funded F-35 procurement at $5.4 billion for 29 aircraft and $561.7 million in advance procurement. In addition, the fiscal year 2015 defense budget bill funded F-35 procurement at $7.8 billion for 34 aircraft. The U.S. has plans to acquire 2,457 JSFs for its Air Force, Marine Corps, and Navy at an estimated acquisition cost of approximately $319.0 billion. In addition, hundreds of F-35s are expected to be acquired by several U.S. allies. Since so many orders need to be fulfilled, Lockheed Martin, the prime contractor of the F-35 program, is assured of receiving F-35 program-related orders at regular intervals. Despite persistent threats of defense budget cuts, Lockheed Martin continues to receive consistent orders from the DoD. This has helped the company to register positive earnings surprises in the last four quarters with an average beat of 20.2%. For 2014, the company boosted its earnings forecast to the range of $10.50–$10.80 from the earlier expectation of $10.25–$10.55. The current Zacks Consensus Estimate for 2014 is pegged at $10.98 with all estimates going up in the last 60 days.
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