Why the Orion Space Launch Bodes Well For Lockheed Martin & Others

NEW YORK (TheStreet) -- Hundreds of companies are hoping to profit after the successful test flight of NASA's Orion spacecraft today from the Cape Canaveral Air Force Station in Florida. But for firms that make Orion's larger components and systems, the spacecraft's orbital journey means these companies will continue to be fueled by NASA's funding tap.

NASA plans on spending about $1 billion per year further developing the Orion space capsule and another $7 billion on the Space Launch System (SLS), as the space agency aims to eventually deliver manned missions to Mars. There will be more than enough money to spread around to the large aerospace and defense contractors working on the project, as well as the 500 small businesses affiliated with the project. 

The number of Orion missions have not been set, but a series of test flights are scheduled. The next text flight is expected to take place in 2018, with the first orbital manned mission slated for sometime in 2020.

Here are a few of the project's primary contractors:

 Lockheed Martin's (LMT) Space Systems Co. is the program manager and primary contractor for the Orion Multi-Purpose Crew Vehicle. The areospace and defense contractor is also participating in the Orion project through its investment in United Launch Alliance, which is co-owns with Boeing (BA) . United Launch Alliance developed the Delta IV Heavy Rocket which lifted the Orion into orbit today.

 

Honeywell (HON) is also on board the Orion project. It developed Orion's intelligent avionics and software that supports the craft's data, navigation and communications systems, which run on the Vehicle Management Computer. The company also contributed the power data unit cards, network interface cards, Orion inertial measurement unit, GPS receiver and barometric.

Hamilton Sundstrand, a division of United Technologies (UTX) , is handling Orion's life support and power systems. It's also a contractor for similar work on Boeing's Commercial Crew Transportation System, another space launch vehicle. Aerojet Rocketdyne, part of GenCorp (GY) , is providing ongoing testing and verification for Orion's powerful motors and engines. Aerojet is likely hoping a successful Orion launch and program will erase investors' memories of its involvement in the Orbital Sciences rocket program, which suffered a catastrophic setback on Oct. 29 when the rocket exploded after launch.

Airbus, in conjunction with the European Space Agency, is the prime contractor for the Orion Service Module. The service module provides propulsion, power supply, thermal control and the central elements of the life support system of the capsule. This component was not included in today's launch, but will be sent into space with the slated 2018 launch.

Alliant Techsystems (ATK)  manufactured the UltraFlex solar array. Each of the two circular solar panels provide over 6,000 watts of power - enough energy to run a half dozen three-bedroom homes. The company is also contracted to provide solar cells for other NASA missions, including the 2016 Insight mission to Mars.

Textron Defense Systems (TXT) provided the ablative heat shield that will protect the capsule during its re-entry, which was also used during the Apollo program.

Ball Aerospace Technologies (BLL) built the phased array antennas and that will help the craft with docking maneuvers.

Must Read: Jim Cramer’s 5 Best Stock Picks for the Biotech Sector

 

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.


TheStreet Ratings team rates LOCKHEED MARTIN CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate LOCKHEED MARTIN CORP (LMT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, good cash flow from operations, notable return on equity and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

You can view the full analysis from the report here: LMT Ratings Report

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