Aerospace and defense company
Alliant Techsystems Inc.
) received a $71 million contract from the U.S. Navy to start a
full rate production of the Advanced Anti-Radiation Guided Missile
("AARGM"). The benefit of these missiles has prompted the defense
department to increase production and opt out from low rate initial
ALLIANT TECHSYS (ATK): Free Stock Analysis
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Per the contract, Alliant will provide operational missiles to the
U.S. Navy and Government of Italy. Besides, the company will also
provide training missile systems and look into other logistics for
manufacturing, sparing, and fleet deployment of these missiles.
Alliant has developed AARGM jointly with other international
players. The missile is an upgrade of the earlier AGM-88 HARM
systems used by the Navy. AARGM employs advanced technology, namely
a millimeter wave terminal seeker, advanced anti-radiation homing
receiver and a Global Positioning System/inertial navigation
system. These features enhance the capacity of the U.S. Navy and
its allied countries to engage in and take out hostile targets.
The missiles are currently used in the U.S. FA-18C/D Hornet
aircraft, but can also be attached to a host of other fighter jets
like the U.S. Navy's EA-18G Growler and FA-18 E/F Super Hornet
aircraft, and the Italian Air Force's Tornado ECR aircraft. The
missile can also be used with F-35, EA-6B, allied FA-18s, and U.S.
and allied F-16s. We believe the flexibility and compatibility of
the missile to be used in different fighter jets facilitates the
U.S. Navy to deploy it in different missions.
Despite persistent pressure on the defense companies from potential
U.S. defense budget cuts, Alliant has been able to post solid
performance in the past few quarters. The company has surpassed our
expectation in the last four quarters thanks to consistent contract
gains from the U.S. defense departments.
We believe this diversified aerospace and defense company will
sustain its strong performance in the upcoming quarters. The
company now expects earnings per share for fiscal 2013 in the range
of $7.00 to $7.30. The Zacks Consensus Estimates for the second
quarter and fiscal 2013 are $1.46 and $7.16 per share,
Alliant Techsystems Inc. currently has a short-term Zacks #1 Rank
(Strong Buy rating). The company competes with
Rockwell Collins Inc.
Elbit Systems Ltd.
Based in Minneapolis, Minnesota, Alliant Techsystems supplies
aerospace and defense products to the United States government
agencies. The company also supplies ammunition and related
accessories to law enforcement agencies and commercial customers.
With a market capitalization of $1.64 billion, the company has
17,100 full time employees.