Credit: Shutterstock photoThe Kremlin said Monday that its deal to sell Saudi Arabia the advanced S-400 system is progressing despite the key U.S. ally getting approval to buy a Lockheed Martin ( LMT ) system Friday.
[ibd-display-video id=2326967 width=50 float=left autostart=true] Late Friday, the State Department OK'd a possible $15 billion sale of 44 Terminal High Altitude Area Defense (THAAD) launchers and 360 missiles from Lockheed. Congress still has to approve the deal.
Meanwhile, Kremlin spokesman Dmitry Peskov told reporters Monday that talks with Riyadh about buying its S-400 air-defense system were going well despite Saudi Arabia's THAAD order with the U.S.
"We can speak only for ourselves," said Peskov. "Contacts to implement this contract have been very positive and have had very good preliminary results."
U.S. NATO ally Turkey also has plans to buy the S-400 system instead of the Medium Extended Air Defense System (MEADS), which is jointly built by Lockheed as well as German and Italian defense companies.
The Russian system's radar is considered especially dangerous to U.S. forces because it can spot a fourth-generation fighter - like Lockheed's F-16 or Boeing 's ( BA ) F-15 and F/A-18 - before the fighter's radar can pick up the air-defense system.
Saudi Arabia typically buys its military hardware from the U.S. or the U.K., and the S-400 deal could signal a shift in politics as the kingdom needs Russia to support oil prices .
Saudi Arabia's King Salman became the first sitting royal to visit the Kremlin last week as the two oil producers met to talk about continuing their current production pact and other investment deals.
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The U.S. is also focused on increasing missile defense at home and for allies as tensions heat up in the Pacific and the Middle East, as well as with Russia.
Last week, Australia said it will outfit its new naval warships with Lockheed's Aegis air-defense system, which is also used by the U.S. and Japan and would help the three navies coordinate on missile-defense missions.
And the Defense Department has asked Congress to shift $416 million into missile defense programs like Lockheed's shipboard Aegis systems, Raytheon 's ( RTN ) Standard Missile-3 Block IIA, Raytheon's Cobra Dane surveillance radar, and Raytheon's Sea-Based X-Band radar, which floats on a Boeing platform.
The Pentagon also wants to boost the number of ground-based interceptors in Fort Greely, Alaska, to 64 from 44 and add 20 missile silos. Boeing's Ground-Based Midcourse Defense system is located there.
Lockheed shares closed up 0.3% on the stock market today , still within buy range. Boeing slipped 0.1%, and also remains in buying territory, while Raytheon added 0.1% to edge closer to profit-taking sell territory.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
