F-117 Fades to Black

And so it ends -- not with a bang but a whoosh.

The Associated Press reports that the U.S. Air Force will hold a "retirement party" for its groundbreaking F-117 Nighthawk fighter jet in April. The F-117 was dubbed the Stealth Fighter when it first entered service in 1981, alluding to its surreal angular shape that gave the plane radar-evading properties. It was the fictional star of Tom Clancy's novel, Red Storm Rising, and the real star of the air wars over Iraq and Serbia, Panama, and Kosovo.

But for all its technological prowess, the Stealth was not a huge commercial success for its builder, Lockheed Martin (NYSE: LMT). Over its 27-year history, fewer than five dozen of the planes were built, the last one nearly two decades ago. In fact, even the Stealth's technology became overblown. Because of the long lead-times required for building military aircraft, much of its technology dated from the 1970s.

Today, the low-tech Stealth has been relegated to the background by new tech, incorporated in the Lockheed / Northrop Grumman (NYSE: NOC) / BAE F-35 Lightning II, and the Lockheed / Boeing (NYSE: BA) / United Technologies (NYSE: UTX) F-22 Raptor, both of which claim "stealthy" status similar to the Nighthawk's.

Cue song, cue hankies
So much for the Nighthawk's wake. After the choruses of "Danny Boy" die down, what we really want to know is what this means for Lockheed's stock. Most likely, it won't cause much of a stir, but what import it does have is good.

You see, according to Wikipedia, each F-117 cost $122 million to build. Although affixing a sticker price to weapons systems is always tricky, if we take that number at face value, it would follow that Lockheed took in about $7.2 billion in revenue over the life of the F-117 program.

That's a decent chunk of change if taken all at once, but spread over the course of the F-117's lifespan, it amounts to just a quarter-bil of annual revenues for Lockheed. Pretty piddling stuff for what's now a $42 billion-per-year revenue giant. Plus, Lockheed built the last F-117 in 1990.

What's important now is that with the F-117 out of service, the Air Force will need Lockheed's Raptors and Lightning IIs more than ever. And with those two programs projected to cost tens of billions each, getting the F-117 cleared out of the way opens the runway to flocks of Raptors and Lightnings. To me, this seems a net positive for Lockheed.