Rockwell Collins, Inc. (COL - Analyst Report) won a $44.5 million foreign military sales (FMS) contract from the Department of Defense (DoD). The firm-fixed price contract entails the task of modernizing three of Boeing Company’s (BA - Analyst Report) KC-135R aerial refueling tankers for the French Air Force.
Rockwell Collins will install KC-135 Global Air Traffic Management Block 40 Upgrade features for the aircrafts. The upgrade job is expected to be concluded by Nov 10, 2015.
A more advanced version of the aerial refueling tanker called the KC-46 is currently making an entry in the U.S. with KC-135R expected to gradually phase out. The KC-135R Stratotanker model refuels long-range bomber, fighter planes, and cargo aircraft in-flight and has a maximum fuel load capacity of 200,000 pounds.
The KC-135R model has the ability to operate as a cargo transport and flies at an altitude of 50,000 feet. It is also capable of carrying 83,000 pounds of cargo. With a steady increase in order deliveries of Boeing’s aircrafts, Rockwell’s original equipment manufacturer business has bounced back.
Given the current defense cutbacks in the U.S., the foreign contracts will offer a stable revenue stream to the company. Rockwell recently secured a modification contract for supporting the Longbow Crew Trainer Virtual Geospecific Database Suites for Saudi pilots operating Apache Longbow attack helicopters.
Moving forward, the company’s constant efforts to bring in cutting-edge technology applications in military and aerospace will allow it to remain well positioned amidst the challenging defense environment.
In addition, the reinstatement of the Federal Research and Development Tax Credit will boost Rockwell’s innovation competencies. At present, Rockwell Collins maintains a Zacks Rank #3 (Hold).
However, other aerospace and defense stocks worth considering are Zacks Ranked #2 (Buy) B/E Aerospace, Inc. (BEAV - Snapshot Report) and Alliant Techsystems Inc. (ATK - Analyst Report).
Headquartered in Cedar Rapids, Iowa, Rockwell Collins designs, produces and supports communications and aviation electronics for commercial and military customers worldwide.