Erickson Wins 5-Year Navy Contract - Analyst Blog


An Erickson Air-Crane Inc. ( EAC ) unit, Evergreen Helicopters International, received a new five-year contract to provide comprehensive replenishment and logistics services to Military Sealift Command.

This firm-fixed price contract will provide replenishment support to the U.S. Fifth and Seventh fleet. These operate largely in the Indian Ocean and Pacific areas and the company's support comprises both sea-based and shore-based support using helicopters. The aggregate value of the contract is $36.6 million and has one base year of performance with four option years.

Erickson-Air Crane has been known to offer aircraft services to the U.S. military over the past four decades. The key factor that drives Erickson-Air Crane's business is its diversified nature of operations. From transport to the energy sector, the company has been successful in spreading its business capabilities in the U.S. as well as in the international market.

The buyout of Evergreen Helicopters from Evergreen International Aviation, Inc. is considered to be an important catalyst for Erickson-Air Crane's growth prospects. This high-quality acquisition boosted the company's industry position and allowed it to secure a slew of domestic and overseas contract extensions in the first half of 2013. Evergreen Helicopters is a diversified provider of air transport services worldwide for cargo and personnel to government and commercial customers.

Again, Erickson Air-Crane entered into a definitive purchase agreement with HRT Participações em Petróleo S.A. ("HRT") to acquire its aviation services division, Air Amazonia Serviços Aeronauticos Ltda. ("Air Amazonia"). Also, per the agreement, the company will take possession of a fleet of six aircraft and ground facilities of HRT. This acquisition will help the company to continue to expand in the South American oil and gas markets.

Despite Erickson Air-Crane's judicious acquisitions as well as contract wins, the company is vulnerable to defense budget cuts and sequestration.

Erickson Air-Crane presently retains a short-term Zacks Rank #3 (Hold). However, other companies in the space that look favorable for the short term include Northrop Grumman Corp ( NOC ), Lockheed Martin Corp. ( LMT ) and Huntington Ingalls Industries ( HII ), all with a Zacks Rank #2 (Buy).

ERICKSON AIR-CR (EAC): Free Stock Analysis Report

HUNTINGTON INGL (HII): Free Stock Analysis Report

LOCKHEED MARTIN (LMT): Free Stock Analysis Report

NORTHROP GRUMMN (NOC): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

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: EAC , HII , LMT , NOC

More from

Related Videos



Most Active by Volume

  • $15.85 ▲ 2.06%
  • $112.34 ▲ 4.29%
  • $57.29 ▲ 0.28%
  • $24.57 ▲ 2.89%
  • $9.32 ▲ 1.08%
  • $103.90 ▲ 2.82%
  • $105.44 ▼ 0.33%
  • $43.36 ▲ 3.68%
As of 9/2/2015, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by