Erickson Air Crane Inc.
) signed a Master Agreement with Sikorsky Aircraft Corp., a unit
United Technologies Corp.
), for manufacturing fabricated aircraft assemblies. The contract
is priced over $5.6 million.
The majority of revenues will be received by Erickson Air
Crane once delivery commences in 2014 running through 2015. Work
on the contract, which includes engineering, legacy aircraft
production, and fabrication of aircraft assemblies, will be
initiated by Erickson Air Crane right away.
Erickson Air Crane with a market capitalization of $144.7
million is focused on both improving and diversifying its
technological expertise. Recent efforts include the upgrading of
Erickson Air Crane's avionics intelligence in its S-64 Aircrane
Helitanker by incorporating Blue Sky Network's satellite tracking
systems. This would enhance the Helitanker's firefighting
The company's technological prowess is expected to open up
multiple avenues for growth. This would help the company to
counter the headwinds in the defense sector. Erickson Air Crane
secured a five-year contract to offer comprehensive replenishment
and logistics services to Military Sealift Command.
The sequestration effect is nevertheless projected to cut
defense spending by $52 billion in fiscal 2014, particularly in
areas of defense R&D. Given the harsh budget environment,
Erickson Air Crane is likely to tread cautiously despite its best
Erickson Air Crane's strategic acquisitions of Air Amazonia
Serviços Aeronauticos Ltda. and Evergreen Helicopters will allow
the company to consolidate its position in the industry. The
acquisition strategy will help offset the company's low-priced
defense contract wins.
The company also sees limited competition in rendering
helicopter services. Erickson Air currently holds a Zacks Rank #3
Other better-placed defense players at the moment are Zacks
Ranked #2 (Buy)
Northrop Grumman Corp.
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