AAR Wins Airlift Services Contract - Analyst Blog


The Airlift unit of aerospace/defense products and services supplier AAR Corp. ( AIR ) has clinched a deal to provide fixed and rotary wing support for the Afghan National Security Forces (ANSF) under the NATO Training Mission - Afghanistan (NTM-A) and Combined Security Transition Command - Afghanistan (CSTC-A) from the U.S. Central Command Joint Theatre Support Contracting Command.

The contract, with a maximum ceiling value of $134 million, calls for AAR Airlift to provide support services to NTM-A and CSTC-A with light fixed-wing, medium fixed-wing, and medium rotary-wing aircraft, personnel, and logistics support.

This Indefinite Delivery/Indefinite Quantity contract reaffirms AAR's competencies in providing airlift services in Afghanistan. The company is the largest provider of lift services to the U.S. Department of Defense (DoD) and has been supporting the DoD in Afghanistan since 2004. AAR will carry out passenger and cargo transport services from 21 locations in Afghanistan under the current agreement.

Wood Dale, Ill.-based AAR provides various products and services to the aviation and defense industries worldwide. Its Airlift Group business unit serves both commercial and government clients. AAR Airlift provides both fixed and rotary-wing flight support, training, aviation maintenance, and aviation refurbishment services.

Recently, the Airlift division received a contract to provide fixed-wing lift services to U.S. Africa Command throughout four Central African countries. The contract is valued at $23 million and includes a base period of seven months plus five three-month option periods.

AAR has maintained a satisfactory competitive position through its market expertise as well as technical and financial capabilities across segments. The company recently reported mixed first quarter fiscal 2014 results. Its bottom line surpassed the Zacks Consensus Estimate driven by efficient cost management. However, a decline in sales at the Technology Products division hurt the top line. Again, sales to commercial customers declined 6.1% year over year during the first quarter of fiscal 2014. The company however expects it to return to growth in the second quarter of fiscal 2014.

Currently, AAR Corp. has a Zacks Rank #3 (Hold). However, other aviation companies like Alliant Techsystems Inc. ( ATK ), Hexcel Corp. ( HXL ) and Teledyne Technologies Inc. ( TDY ) are worth looking into now. While Alliant Techsystems sports a Zacks Rank #1 (Strong Buy),  Hexcel and Teledyne carry a Zacks Rank #2 (Buy).

AAR CORP (AIR): Free Stock Analysis Report

ALLIANT TECHSYS (ATK): Free Stock Analysis Report

HEXCEL CORP (HXL): Free Stock Analysis Report

TELEDYNE TECH (TDY): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: AIR , ATK , HXL , TDY



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