Lockheed Martin wins $1.2B army contract for precision missile

The U.S. Army has awarded Lockheed Martin (NYSE: LMT) an indefinite delivery, indefinite quantity contract worth up to $1.2 billion to produce Increment 2 of the Precision Strike Missile (PrSM), according to a company press release dated Sept. 21, 2026.

The contract covers initial procurement and future orders of PrSM Increment 2 missiles, follow-on production, and continued development. Work will be performed at Lockheed Martin facilities across its U.S. industrial base.

The award follows two flight tests of the PrSM Increment 2. The first took place in March 2026, and the second occurred in August 2026. The August test involved launching from a HIMARS rocket system, deploying protective covers, and engaging a moving maritime target. Additional flight tests are scheduled for 2027.

Increment 2 adds a multimode seeker designed to allow the missile to engage moving land and maritime targets, expanding on the capabilities of the baseline PrSM system. Technologies from Lockheed Martin's Strigo family of solutions informed aspects of the Increment 2 guidance package.

"This award marks an important step in delivering PrSM Increment 2 to the warfighter," said Dave Griser, vice president of Precision Fires Launchers and Missile at Lockheed Martin. "We're ready to move from flight testing into production and provide the Army with an expanded long-range precision fires capability."

Lockheed Martin said it is expanding production capacity to quadruple PrSM output while continuing development of additional PrSM increments. The company said it will begin production of initial Increment 2 missiles while continuing flight testing and system maturation.

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