Lockheed Martin Gains Altitude

News of a $1.4 billion Air Force contract -- and plans for a dividend hike and share buyback -- lifted the stock Friday

Lockheed Martin (LMT) share prices edged ahead on Sept. 29, after the technology company snared a $1.4 billion services contract from the U.S. Department of Defense, hiked its dividend by 5 cents per share and announced plans to buy back up to 20 million shares.

The Bethesda, Md.-based company's stock price gained 0.3% to $85.89 per share in early trading on the New York Stock Exchange. The stock hit a new 52-week high from its low of $58.50 per share on Oct. 13, 2005.

Lockheed Martin has a deal to provide $1.4 billion of support services for the Air Force's F-117 weapon system, the Department of Defense said late Sept. 28. Lockheed may get called upon to perform services such as modifying stealth aircraft. The work completes in September 2012.

On the same day, Lockheed announced that its quarterly dividend will increase by 5 cents to 35 cents per share. The dividend is payable to shareholders Dec. 29, 2006.

Lockheed also plans to buy back shares as part of a repurchase program, under which the number of shares and timing of purchases remain at management's discretion. Lockheed had around 422 million shares outstanding as of June 30, after having bought back 21.5 million shares during the first half of 2006 and 67.6 million shares in total since its program began October, 2002. The company can buy back 88 million shares under the program either in the open market or private deals.

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