Orbital ATK, Inc. (OA - Analyst Report) , in partnership with Airbus Group SE’s (EADSY - Snapshot Report) Defence and Space division, has secured a contract from Eutelsat Communications S.A. for building the EUTELSAT 5 West B satellite for an undisclosed amount.
Details of the Contract
Eutelsat is looking to capitalize on the companies’ expertise in the satellite industry. Orbital ATK will provide the GEOStar satellite platform to the spacecraft, while Airbus Defence and Space will supply the communications payload of 35 active Ku-band channels.
Expected to have an operational life of over 15 years, the spacecraft will be designed, developed and tested at Orbital ATK’s advanced satellite manufacturing unit in Dulles, VA.
EUTELSAT 5 West B is slated for launch in 2018 onboard an International Launch Services Proton vehicle from Russia. It is the 41st commercial satellite ordered and manufactured by Orbital ATK.
Note that Orbital ATK is also developing commercial satellites for other companies like Avanti Communications Group PLC .L), Yahsat Satellite Communications and SES S.A.
Cause for Concern
Defense is a highly competitive sector, which is evolving rapidly. In order to remain competitive in the space, Orbital ATK needs to offer very high-quality products and services, which can be achieved primarily by upgrading technologies through innovative research and development programs, and a skilled workforce. If Orbital ATK fails to introduce innovative products that meet these changing needs, and train existing employees with modern technologies and retain qualified professionals, the company will be unable to compete with its peers.
Orbital ATK carries a Zacks Rank #4 (Sell). A better-ranked stock in the same space is AAR Corporation .
AAR Corp. has witnessed one upward estimate revision for fiscal 2017 over the last 60 days. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here
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