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Alliant Signs Pact with Airbus

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Alliant Techsystems Inc. has received a contract, worth more than $100 million, from Airbus Military to manufacture composite wing cover stringers for the A400M military transport aircrafts. Per the agreement, Alliant will provide 122 wing cover stringers per aircraft for Airbus’s 180 aircrafts. The company will roll out the deliveries from its Aircraft Commercial Center of Excellence (“ACCE”) facility in Clearfield, Utah.

Airbus Military's A400M aircraft is a new generation, cost-effective, four-engine, high-speed turboprop military transport aircraft. With eight-bladed propellers, the A400M aircraft is able to travel with speed of up to Mach 0.72 and altitudes of up to 37,000 feet.

Airbus has designed this aircraft to meet the needs of the North Atlantic Treaty Organization (“NATO”) nations and other international air forces. This aircraft is on high demand and Airbus has already received contracts to sale 174 A400M aircrafts.

If sales of aircrafts rise, Alliant, as an expert manufacturer of composite wing cover stringers, will correspondingly get more contracts in the future. This would lead to an improvement in the company’s forthcoming financial results.

Alliant is expected to release its second-quarter of fiscal-year 2013 results on November 1, 2012 before the market opens. The Zacks Consensus Estimates for second-quarter and fiscal-year 2013 are currently pegged at $1.48 and $7.15 per share, respectively.

We consider this contract as a finance booster for Alliant and will enable the company to further strengthen the ongoing strategic alliance with Airbus.

Alliant’s two biggest clients are the National Aeronautics and Space Administration and the U.S. Department of Defense, and therefore the expected U.S. defense budget cutbacks could limit the company’s future growth prospects. In addition, higher level of competition from a number of players in each of its business segments is also our major concern.

Alliant Techsystems Inc. currently has a short-term Zacks #4 Rank (Sell rating).

Arlington, Virginia-based Alliant Techsystems Inc. provides aerospace and defense products to the U.S. government agencies. The company also supplies ammunition and related accessories to law enforcement agencies and commercial customers. With a market capitalization of $1.85 billion, Alliant has 17,000 full time employees. The company competes with Rockwell Collins Inc. (COL - Free Report) .

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