The U.S. Air Force awarded both Lockheed Martin Corp (LMT) and Raytheon Co (RTN) 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The missiles will be designed to replace Boeing Co's (BA) out-of-date weapon in use today.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) 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.
More of What's Trending on TheStreet: