Back to top

Image: Bigstock

L3 Technologies Wins Deal to Deliver WESCAM MX-10D Sensor

Read MoreHide Full Article

L3 Technologies, Inc. recently clinched a contract worth $454 million for delivering the next-generation WESCAM MX-10D electro-optical/infrared (EO/IR) and laser designator sensor suite to the U.S. Army. Originally a five-year contract, the U.S. Army will be given an option to extend contract validation for an additional five years, if required.

What’s WESCAM MX-10D Sensors?

L3 Technologies’ WESCAM MX-10D sensors are primarily effective for low-altitude tactical surveillance, target acquisition and designation missions requiring low-weight installation flexibility. Its WESCAM imaging and targeting turrets are known to deliver precision situational awareness, which enable users to overcome emerging regional and global threats. These modernized ISR systems operate from the Army’s Tactical Unmanned Air Systems Shadow unmanned aerial vehicle (UAV) and provide advanced capabilities to collect critical information.

WESCAM’s Importance for L3 Technologies

Mid-July 2018, the company revealed that its WESCAM business won orders worth more than $300 million in the first half of 2018. This reflects the solid demand L3 Technolgies enjoys for its WESCAM sensors.

Furthermore, toward the end of July 2018, WESCAM successfully delivered its first MX-15 EO/IR system to Airbus Defense and Space, in support of Canada’s Fixed-Wing Search and Rescue (FWSAR) aircraft replacement program. These developments should allow L3 Technologies to secure a dominant position in the global UAV drone market. Also, considering surveillance and targeting upgrades, this may further expand the company’s growth opportunities globally for its EO/IR sensors.          

Additionally, increasing geopolitical and socio-economic tensions, and recent technological advancements in unmanned aerial vehicle drones globally is likely to further augment demand for UAV in emerging countries. This has significantly boosted growth prospects of the global UAV market, which is projected to see a CAGR of 14.2% from 2018 to 2025, to reach a value of $52.3 billion in 2025. Such solid growth opportunities offered by this market should bode well for defense contractors like L3 Technologies that manufactures valued sensors for the global UAV market.

Price Movement

In a year’s time, shares of L3 Technologies increased 13.3% compared with the industry’s 21% rally. The underperformance can be attributed to weak performance in some of the company’s product lines.




Zacks Rank & Other Stocks to Consider

L3 Technologies currently carries a Zacks Rank #2 (Buy). A few other top-ranked stocks in the same sector are Huntington Ingalls Industries (HII - Free Report) , Heico Corporation (HEI - Free Report) and FLIR Systems .

While Huntington Ingalls sports a Zacks Rank #1 (Strong Buy), Heico and FLIR Systems carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Huntington Ingalls pulled off an average positive earnings surprise of 9.48% for the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings has moved 6.4% north to $17.24 in the last 90 days.

Heico came up with an average positive earnings surprise of 2.15% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen 2.73% to $1.88 in the last 90 days.

FLIR Systems came up with an average positive earnings surprise of 8.49% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen 2.78% to $2.22 in the last 90 days.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Huntington Ingalls Industries, Inc. (HII) - free report >>

Heico Corporation (HEI) - free report >>

Published in