L-3 Communications Holdings Inc.’s (LLL - Free Report) business wing L-3 MAS has received a five-year contract from the Government of Canada to provide complete in-service support services (“ISS”) for the country’s CC-150 Polaris fleet. The contract has two five-year option periods which, if exercised, would bring the value of the contract to $669 million.
Per the contract, the company will be responsible for overall program management, material management, engineering support, flightline maintenance, heavy maintenance, and component maintenance, repair and overhaul services of the CC-150 aircraft. The company had originally received a contract from the Canadian government to provide complete ISS for the Department of National Defence (“DND”) CC - 150 ‘Polaris’ Airbus fleet in Jun 2012.
The CC-150 aircraft is used by the DND for high-profile missions such as VIP transportation and strategic air-to-air refueling, as well as passenger, freight and medical evacuation transportation.
The company continues to expand its logistics solutions capabilities internationally. This contract will provide additional diversity to the company’s Canadian military ISS business base.
Last month, the company posted second quarter 2013 results with top and bottom line beating the Zacks Consensus Estimate. L-3 Communications’ revenue base is spread across a broad diversification of programs. Over the longer run, we view the company as one of the best-positioned pure defense players based on its non-platform focus, broad diversification of programs and its focus on shareholder value.
However, negative offsets include the loss of key contracts, defense spending cuts and the lack of near-term catalysts. The company presently retains a short-term Zacks Rank #3 (Hold).
Among the stocks worth considering in the space are Raytheon Company (RTN - Free Report) , Lockheed Martin Corp. (LMT - Free Report) and Northrop Grumman Corp. (NOC - Free Report) . While Raytheon carries a Zacks Rank #1 (Strong Buy), Lockheed Martin and Northrop Grumman hold a Zacks Rank #2 (Buy).