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L3 Technologies Wins $454M Contract for EO/IR Laser Payload

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L3 Technologies, Inc. (LLL - Free Report) recently secured a contract worth $454 million for the Electro-Optic/Infrared (EO/IR) — Laser Designator Payload. The contract was awarded by the U.S. Army Contracting Command, Aberdeen Proving Ground, Maryland. Work related to the deal is expected to be completed by Aug 28, 2023.

A Brief Note on EO/IR Laser Designator Payload

L3 Technologies' subsidiary, WESCAM designs and manufactures industry-leading next-generation Electro-Optic/Infrared (EO/IR), laser imaging and targeting sensor systems. Designed for ISR airborne, ground and sea- based missions, these sensor systems provide unparalleled image stability and long-range optical information detection capability to Defense/Military, Homeland Security and Airborne law enforcement agencies worldwide.

What’s Favoring L3 Technologies?

L3 Technologies' Sensor Systems segment that provides networked warfighter systems, integrated ISR and targeting systems, space avionics, and imaging payloads along with other major sensor-based capabilities recorded net sales of $476 million reflecting a 22% year-over-year surge. We believe this latest contract involving the EO/IR Laser Designator Payload will boost the segment's performance, going forward.

Notably, Sensor Systems is the company’s fastest growing segment. It witnessed strong order growth in the second quarter of 2018 for its WESCAM and Maritime sensor systems. As the U.S. Army plans to purchase 100,000 night vision goggles in the years ahead, it makes us believe that L3 Technologies is positioned to clinch big contracts and establish a stronger share in the sensor-based systems market.

Furthermore, toward the end of July 2018, WESCAM successfully delivered its first MX-15 EO/IR system to Airbus Defense and Space in support of Canada’s Fixed-Wing Search and Rescue (FWSAR) aircraft replacement program. As the company’s market share continues to grow, both domestically and internationally, securing pivotal contracts will surely boost its revenues, going forward.

Price Movement

In a year’s time, shares of L3 Technologies have increased 16.3% compared with the industry’s 29.1% rally. The underperformance can be attributed to weak performance in some of its product lines.

Zacks Rank & Other Stocks to Consider

L3 Technologies currently sports a Zacks Rank #1 (Strong Buy).

A few other top-ranked stocks in the same sector are Aerojet Rocketdyne Holdings (AJRD - Free Report) , Engility Holdings (EGL - Free Report) and Huntington Ingalls Industries (HII - Free Report) .

While Aerojet Rocketdyne Holdings sports the same Zacks Rank as L3 Technologies, Engility Holdings and Huntington Ingalls carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Aerojet Rocketdyne came up with an average positive earnings surprise of 9.27% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 30.9% to $1.27 in the last 90 days.

Engility Holdings delivered an average positive earnings surprise of 19% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 16.8% to $2.02 in the last 90 days.

Huntington Ingalls Industries came up with an average positive earnings surprise of 9.48% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 3.7% to $17.24 in the last 90 days.

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