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Textron (TXT) Wins Contract to Aid UH-1Y & AH-1Z Aircraft
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Textron Inc.’s (TXT - Free Report) business unit, Bell, secured a contract to support UH-1Y and AH-1Z helicopters. The award has been offered by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $22.5 million, the contract is expected to be completed by July 2026. Per the terms of the deal, Textron will provide aircraft maintenance as well as engineering services for eight UH-1Y and four AH-1Z aircraft.
The contract will serve the government of the Czech Republic. Work related to this deal will be carried out in Namest, Czech Republic.
What’s Favoring Textron?
Countries across the globe have been reinforcing their military resources due to intense geopolitical tensions and amplified terrorist threats.
Among other combat arsenals and weaponry, military helicopters have been gaining importance owing to advancements and integration of new tactical and logistical features. This has provided ample opportunities for Textron to win production and modification contracts for helicopters in recent times. The latest contract is an example of that. Such contract wins are likely to boost revenues from the Bell unit.
Growth Prospects
The increased defense budget of many nations, as a repercussion of the Russian-Ukraine war, has resulted in a surge in demand for military arms and ammunitions of late. This may have led to increased defense spending on military helicopters as well.
Per a report from Mordor Intelligence, the military rotorcraft market is likely to witness a CAGR of more than 4% during 2022-2027.
To this end, it is imperative to mention that the Bell unit is currently developing a new rotorcraft, the Bell 360 Invictus, for the U.S. Army's Future Attack Reconnaissance Aircraft Competitive Prototype Program, which is also part of the U.S. government's FVL initiative.
As of December 2022, the 360 Invictus was nearly complete, and the company expects its first flight in 2023, pending delivery of the ICAP engine. Further, the unit’s first super medium commercial helicopter, the 525 Relentless, is currently in the certification process with the Federal Aviation Administration.
Once these helicopters are marketed, Textron can be expected to gain more from the expanding military rotorcraft market.
The growth prospects of the military rotorcraft market should also benefit other defense primes like Lockheed Martin (LMT - Free Report) , Boeing (BA - Free Report) and Northrop Grumman (NOC - Free Report) , which have already established their position in the military helicopter arena.
Lockheed Martin’s Sikorsky business segment provides military and rotary-wing aircraft for U.S. armed forces, along with military services and commercial operators in 40 nations. Some of its products are CH-53K, S-92, UH-60 Black Hawk etc.
LMT’s long-term earnings growth rate is 6.2%. Its shares have risen 9.4% in the past year.
Boeing’s portfolio of helicopters comprises of the AH-6 Little Bird, AH-64 Apache, V-22 Osprey and H-47 Chinook aircraft and in-development entrants, which include the MH-139A Grey Wolf and DEFIANT X. Its military rotorcraft is currently used by the U.S. Army, Navy, Marines and Air Force as well as allied defense forces in more than 20 countries across the globe.
BA’s long-term earnings growth rate is 4%. The Zacks Consensus Estimate for its 2023 sales indicates an improvement of 17.9% from the 2022 reported figure.
Northrop Grumman’s Fire Scout is a combat-proven, autonomous helicopter system providing real-time intelligence, surveillance, reconnaissance and target-acquisition, laser designation and battle management for tactical users without relying on manned aircraft or space-based assets. It has two variants — MQ-8B Fire Scout and MQ-8C Fire Scout.
NOC has a long-term earnings growth rate of 3.8%. The Zacks Consensus Estimate for its 2023 sales implies growth of 4.7% from the previous year’s reported actual.
Price Performance
Shares of Textron have rallied 11.9% in the past year against the industry’s decline of 0.4%.
Image: Shutterstock
Textron (TXT) Wins Contract to Aid UH-1Y & AH-1Z Aircraft
Textron Inc.’s (TXT - Free Report) business unit, Bell, secured a contract to support UH-1Y and AH-1Z helicopters. The award has been offered by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $22.5 million, the contract is expected to be completed by July 2026. Per the terms of the deal, Textron will provide aircraft maintenance as well as engineering services for eight UH-1Y and four AH-1Z aircraft.
The contract will serve the government of the Czech Republic. Work related to this deal will be carried out in Namest, Czech Republic.
What’s Favoring Textron?
Countries across the globe have been reinforcing their military resources due to intense geopolitical tensions and amplified terrorist threats.
Among other combat arsenals and weaponry, military helicopters have been gaining importance owing to advancements and integration of new tactical and logistical features. This has provided ample opportunities for Textron to win production and modification contracts for helicopters in recent times. The latest contract is an example of that. Such contract wins are likely to boost revenues from the Bell unit.
Growth Prospects
The increased defense budget of many nations, as a repercussion of the Russian-Ukraine war, has resulted in a surge in demand for military arms and ammunitions of late. This may have led to increased defense spending on military helicopters as well.
Per a report from Mordor Intelligence, the military rotorcraft market is likely to witness a CAGR of more than 4% during 2022-2027.
To this end, it is imperative to mention that the Bell unit is currently developing a new rotorcraft, the Bell 360 Invictus, for the U.S. Army's Future Attack Reconnaissance Aircraft Competitive Prototype Program, which is also part of the U.S. government's FVL initiative.
As of December 2022, the 360 Invictus was nearly complete, and the company expects its first flight in 2023, pending delivery of the ICAP engine. Further, the unit’s first super medium commercial helicopter, the 525 Relentless, is currently in the certification process with the Federal Aviation Administration.
Once these helicopters are marketed, Textron can be expected to gain more from the expanding military rotorcraft market.
The growth prospects of the military rotorcraft market should also benefit other defense primes like Lockheed Martin (LMT - Free Report) , Boeing (BA - Free Report) and Northrop Grumman (NOC - Free Report) , which have already established their position in the military helicopter arena.
Lockheed Martin’s Sikorsky business segment provides military and rotary-wing aircraft for U.S. armed forces, along with military services and commercial operators in 40 nations. Some of its products are CH-53K, S-92, UH-60 Black Hawk etc.
LMT’s long-term earnings growth rate is 6.2%. Its shares have risen 9.4% in the past year.
Boeing’s portfolio of helicopters comprises of the AH-6 Little Bird, AH-64 Apache, V-22 Osprey and H-47 Chinook aircraft and in-development entrants, which include the MH-139A Grey Wolf and DEFIANT X. Its military rotorcraft is currently used by the U.S. Army, Navy, Marines and Air Force as well as allied defense forces in more than 20 countries across the globe.
BA’s long-term earnings growth rate is 4%. The Zacks Consensus Estimate for its 2023 sales indicates an improvement of 17.9% from the 2022 reported figure.
Northrop Grumman’s Fire Scout is a combat-proven, autonomous helicopter system providing real-time intelligence, surveillance, reconnaissance and target-acquisition, laser designation and battle management for tactical users without relying on manned aircraft or space-based assets. It has two variants — MQ-8B Fire Scout and MQ-8C Fire Scout.
NOC has a long-term earnings growth rate of 3.8%. The Zacks Consensus Estimate for its 2023 sales implies growth of 4.7% from the previous year’s reported actual.
Price Performance
Shares of Textron have rallied 11.9% in the past year against the industry’s decline of 0.4%.
Image Source: Zacks Investment Research
Zacks Rank
Textron currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.