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Yesterday, Vision Systems International, a joint venture between a unit of Elbit Systems Ltd. and Rockwell Collins Inc. (COL - Analyst Report), received a contract to supply about 100 Night Vision Cueing Display (NVCD) systems through November 2013. The NVCD LRIP-2 contract, valued at nearly $19.8 million, is an extension of a $3.8 million NVCD LRIP-2 logistics contract awarded in September 2011.

Under the contract, Vision System will alter the Helmet Mounted Display (HMD), which is set to provide NVCD capabilities while providing engineering support. Vision System will incorporate the NVCD technology into the Joint Helmet Mounted Cueing System (JHMCS), which is installed in aircrafts. This will enhance the capability of the Joint Helmet Mounted Cueing Systems on aircrafts, making it compatible for night missions.

Currently, the new technology will be used on board of the U.S. Air Force’s F-15 and F-16 aircrafts, and Navy’s F/A-18 aircraft.

In November last year, Vision Systems won a contract from the Aerospace division of defense behemoth, Lockheed Martin Corporation (LMT - Analyst Report) to enhance the helmet mounted display system (HMDS) on the F-35. Comprising of two additional phases in the development, the contract will focus on improving the F-35 HMDS in production for the 5th generation Lightning II Joint Strike Fighter aircraft.

To date, VSI has produced more than 4,500 joint helmet mounted cueing systems (JHMCS) for the F-15, F-16 and F/A-18 aircraft. VSI is also currently under contract to deliver Night Vision Cueing and Display Systems (NVCD) to the US Air Force and Navy, and the Fifth Generation HMDS for the F-35 Joint Strike Fighter. It also produces the Targo HMDs for multiple aviation, including fighters, light attack, military airlift and trainers.

Rockwell Collins is a pioneer in the development and deployment of innovative communication and aviation electronic solutions for both commercial and government applications. It has expertise in flight deck avionics, cabin electronics, mission communications, information management, and simulation and training.

Rockwell Collins currently retains its Zacks #4 Rank, which translates into a short-term Sell rating. Considering the fundamentals, we are maintaining our Neutral recommendation on the stock.

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