Textron Marine & Land Systems (TM&LS), an operating unit of Textron Inc. (TXT - Analyst Report) , has received a contract worth $5.5 million to provide 12 armored turrets, technical support services, vehicle repairs and spare parts from the U.S. Army Tank-Automotive and Armaments Command (“TACOM”). These equipment and services will be employed in the Colombian Army's (“COLAR”) Armored Personnel Carriers (“APC”).
Textron Marine & Land Systems is specialized in the design, production and support of advanced marine craft, armored combat vehicles, turrets and related subsystems. Apart from providing armored vehicles, the company also offers uninterrupted COMMANDO fielding, training, maintenance and logistics support throughout each vehicle's life cycle to its customers.
Textron’s APCs are an extended version of the M1117 Armored Security Vehicle (“ASV”). With an additional two feet length and six inch internal height, APCs have greater troop carrying capacity in its areas of operations. The vehicle is used by the U.S. Army and other militaries in locations including Afghanistan and Iraq.
The vehicle features a V-shaped hull bottom and 360-degree protection from direct fire. These vehicles are part of the COMMANDO Advanced line of armored vehicles that have outstanding on-road and off-road mobility, thereby allowing them to operate in urban, jungle, desert as well as mountainous terrain.
Currently, COLAR operates 39 COMMANDO Advanced APCs. Also, under a Foreign Military Sales contract, it has made a request to purchase additional APCs. Going forward, these APC contacts would bring in more vehicle repairs and spare parts sales for the company.
Moreover, the company is working with Colombia to increase the number of APCs in COLAR units while sustaining its entire vehicle fleet with a coordinated program of maintenance, training and field service support. This would become a source of uninterrupted revenue for the company, going forward.
Textron Inc. is a global multi-industry company that manufactures aircraft, automotive engine components, and industrial tools. It is also a provider of solutions and services for aircraft, fastening systems, and industrial products and components. Textron’s geographically-diverse network of aircraft, defense & intelligence, industrial and finance businesses negates any specific business risk.
Also, a modest increase in jet deliveries, higher revenue mix of business jets, growth in aftermarket sales, increase in commercial helicopter demand, and sales growth at Systems would boost top and bottom lines of the company. However, we remain concerned about the lower backlog at Cessna, rate of recovery of the business jet market, and defense spending cutbacks. The company presently retains a short-term Zacks Rank #3 (Hold).
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