Defense major L3 Technologies, Inc.’s business unit, Vertex Aerospace recently clinched a modification contract to exercise an option for the organizational and depot-level logistics services. These services will be provided for the support and maintenance of the TH-57 fleet of military helicopters.
Valued at $83.1 million, the contract was awarded by the Naval Air Systems Command, Patuxent River, MD. Work related to this deal will be carried out at the Naval Air Station Whiting Field, Milton, FL and is expected to be over by May 2018.
A Brief Note on TH-57
Manufactured by Textron Inc.’s (TXT - Free Report) Bell Helicopter business unit, TH-57 is a military derivative of the commercial Bell Jet Ranger 206. Apart from being utilized for copter flight training — which happens to be its primary operation — these aircraft are also used for chase, utility missions as well as taking photo.
Better known as the TH-57 Sea Ranger, this fleet of jets provides advanced (IFR) training to several hundred aviation students a year at the Naval Air Station Whiting Field in Milton, FL.
L3 Technologies’ Vertex Aerospace unit’s service includes aircraft repair and maintenance, flight operations support for training, transport/cargo and special mission aircraft. Being one of the prime system contractors for aircraft modernization and maintenance, Intelligence, Surveillance & Reconnaissance (“ISR”) collection platforms, simulation and training, and government systems support services, the company continues to receive notable contracts like the aforementioned one from the Pentagon. In fact, last month, this business unit won a $202.2 million-worth Navy contract to offer depot-level maintenance, logistics and sustaining engineering services for the C-12 utility lift aircraft.
Going ahead, the company expects to gradually transform its business portfolio to focus on defense electronics, communications and ISR markets. These initiatives, along with Trump’s proposal to boost the nation’s defense budget by 10% in 2018 from that of 2016, are likely to benefit defense biggies like L3 Technologies.
L3 Technologies’ stock has gained about 21.1% in the last one year, underperforming the Zacks categorized Electronic-Military industry’s gain of 22%.This could be owing to the weak performance the company has been witnessing in some of its product lines. Moreover, margin headwinds continue to hamper its results. Also the company faces tough competition from its peers like FLIR Systems, Inc. (FLIR - Free Report) and Arotech Corp. .
L3 Technologies currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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