The U.S. Air Force awarded both Lockheed Martin Corp (LMT) - Get Lockheed Martin Corporation (LMT) Report and Raytheon Co (RTN) - Get Raytheon Company Report a $900 million, 54-month contract to develop a new nuclear cruise missile for long-range bombers, the Air Force said in a statement.
The missiles will be designed to replace Boeing Co's (BA) - Get Boeing Company Report out-of-date weapon in use today. Boeing said it was "disappointed it was not chosen," a spokeswoman told Bloomberg.
After the 54 months are up and both Lockheed and Raytheon have developed a new Long-Range Standoff missile, the Air Force will choose one of the contractors to enter full production of as many as 1,000 missiles in an acquisition valued at about $10 billion. Not all the missiles will be topped by nuclear warheads.
The announcement of Lockheed's and Raytheon's contracts comes days after Boeing and Northrup Grumman Corp (NOC) - Get Northrop Grumman Corporation Report won contracts to refine concepts for a new intercontinental ballistic missile from the Air Force.
Lockheed stock closed trading down 0.11% to $302.50 and Boeing was little changed, up 0.26% to $238.72 Thursday. Raytheon shares were down 0.08% to $178.04.
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