Lockheed Wins US Army Missile Contract Worth Up to $1.2 Billion

• PrSM Increment 2 successfully completed a second flight test, demonstrating capability to engage moving maritime targets
• The contract builds on previous commitments, including a $4.94 billion Army contract awarded last year and a seven-year agreement in March to increase annual production capacity to 550 missiles
• The weapon has already seen combat use during Operation Epic Fury as Lockheed ramps up production to meet growing demand for long-range strike weapons

Lockheed Martin Secures $1.2 Billion U.S. Army Missile Contract

Lockheed Martin announced Monday it has won a contract worth up to $1.2 billion from the U.S. Army to produce the Increment 2 variant of its Precision Strike Missile (PrSM). The award represents a significant expansion of the defense contractor's long-range weapons portfolio.

Key Contract Details:

• The PrSM is the Army's next-generation long-range precision strike weapon
• Designed to replace the legacy Army Tactical Missile System (ATACMS)
• The Increment 2 variant features enhanced maritime targeting capabilities, successfully demonstrated in a recent flight test engaging moving maritime targets

Production Scale-Up:

This contract follows aggressive production expansion plans. In March, Lockheed signed a seven-year agreement with the U.S. Department of Defense to increase annual production capacity to 550 missiles. This builds on a substantial $4.94 billion Army contract awarded last year.

Market Context:

The award comes amid heightened global demand for long-range precision strike weapons, driven by evolving battlefield requirements. The PrSM has already seen combat deployment during Operation Epic Fury, validating its operational effectiveness.

Implications:

For Lockheed Martin, this contract strengthens its position in the growing precision weapons market and supports continued revenue visibility in its missiles and fire control division. The multi-billion dollar program trajectory, including the previous $4.94 billion contract, positions PrSM as a major revenue driver through the end of the decade.

The announcement underscores sustained defense modernization spending priorities, particularly in long-range strike capabilities, benefiting major defense contractors amid global security tensions.