Textron Marine & Land Systems, an operating unit of Textron Inc. (TXT - Analyst Report), has received a firm fixed-price contract worth $113.4 million for the production of an additional 135 Mobile Strike Force Vehicles (“MSFV”) for the Afghan National Army (“ANA”). This Foreign Military Sales (“FMS”) contract has been awarded by the U.S. Army Contracting Command, Warren, Michigan.
Per the contract, Textron will produce three armored vehicle variants namely, MSFV with enclosed turret; MSFV with Objective Gunner's Protection Kit; and an MSFV ambulance. The vehicle deliveries are expected to be made through Feb 2014.
In May 2011, the company had received a contract for full-rate production of 240 MSFVs along with associated support equipment, spare parts, field service representatives, training and training aids. Since then, the company has been fulfilling contract orders for 499 vehicles. Out of this more than 300 vehicles have either been delivered or are in operations with ANA battalions or are being used as a part of a comprehensive in-country vehicle logistics support and operator training program.
Mobile Strike Force Vehicles are a part of the TM&LS COMMANDO Select line of armored vehicles and are derived from the combat-proven M1117 Armored Security Vehicle (“ASV”). These vehicles feature Enhanced Survivability (“ES”) capability. The ES-equipped vehicles also have a V-shaped hull design that is available in ASV. The ES capability increases blast protection to mine-resistant, ambush-protected (MRAP) levels. These vehicles form the COMMANDO(TM) family of vehicles that are thoroughly tested and proven and offer a range of supreme protection levels.
Textron Inc. is a global multi-industry company that manufactures aircraft, automotive engine components, and industrial tools. It is also a provider of solutions and services for aircraft, fastening systems, and industrial products and components. The company's products include commercial and military helicopters, light- and mid-size business jets, plastic fuel tanks, automotive trim products, golf carts and utility vehicles, turf-care equipment, industrial pumps and gears, engineered fastening systems and solutions, and other industrial products.
The diversified presence across commercial, manufacturing and industrial products, as well as financing operations, insulates the company from specific business risk. Also, its bottom line should get a boost from the modest increase in jet deliveries, higher revenue mix of business jets, growth in aftermarket sales, increase in commercial helicopter, and sales growth at Systems.
However, we remain concerned about the lower backlog at Cessna, rate of recovery of the business jet market, and defense spending cutbacks. The company presently retains a short-term Zacks Rank #3 (Hold).
Other stocks to consider are Tyco International Ltd. (TYC - Analyst Report), Macquarie Infrastructure Company LLC (MIC - Snapshot Report) and Crane Co. (CR - Snapshot Report), all with a Zacks Rank #2 (Buy).