L-3 Communications Holdings Inc.
) received two contracts worth approximately $39.7 million from
the U.S. Department of Defense (DoD) on Friday, Apr 4, 2014. The
deep and diversified portfolio of its product offerings enables
the company to win defense contracts at regular intervals.
However, the share price edged down 1.2% on Monday, Apr 7, 2014
primarily due to slackness noticed in the overall trading index.
The majority of big names in the aerospace and defense industry
shed a part of their value in yesterday's intraday trade.
The bigger of the two contracts, worth $24.7 million, was awarded
to L-3 Communications Aerospace LLC. Per the contract, the L-3
unit will inspect, maintain and do repair work on different
aircraft and aircraft components through Oct 28, 2014. This work
will be done at the Corpus Christi Army Depot, Naval Air Station,
Corpus Christi, TX.
The second contract, worth $15.0 million, was received by L-3
Kollmorgen Electro-Optical (KEO). Per the contract, this L-3 unit
will work on the production of 16 universal modular masts (UMM).
UMM is a non-hull penetrating mast which is installed on
Virginia-class submarines. The program is scheduled to complete
by May 2016. 74% of the work will be completed in Bologna, Italy
and the remaining 26% will be done in Northampton, MA.
Apart from these contracts L-3 Communications had received
another big contract from the DoD in the first quarter of 2014.
The company's Coleman Aerospace business received a contract
worth $73 million from the U.S. Missile Defense Agency in Feb
2014. If both the parties agree, the contract may be extended to
more than $400 million over the next five years.
L-3 Communications, a Zacks Rank #2 (Buy) stock, has been posting
strong financial results, surpassing our estimates by 4.75% on an
average in the last 4 quarters. The strong performance was driven
by program execution capability, cost cutting initiatives as well
as contribution from its international and commercial businesses.
L-3 Communications surpassed the Zacks Consensus Estimate in the
last reported quarter as well as full year 2013. For 2014, the
company's earnings guidance is in the range of $8.15 to $8.35 per
share. The Zacks Consensus Estimate for 2014 earnings is above
the guidance range at $8.40 per share.
Besides L-3 Communications some of the other defense players to
look out for include
Huntington Ingalls Industries, Inc.
General Dynamics Corp.
). While Huntington Ingalls holds a Zacks Rank #1 (Strong Buy),
Raytheon and General Dynamics carry a Zacks Rank #2 (Buy).
GENL DYNAMICS (GD): Free Stock Analysis
HUNTINGTON INGL (HII): Free Stock Analysis
L-3 COMM HLDGS (LLL): Free Stock Analysis
RAYTHEON CO (RTN): Free Stock Analysis Report
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