L-3 Communications Holdings Inc.
) business wing L-3 MAS has received a five-year contract from
the Government of Canada to provide complete in-service support
services ("ISS") for the country's CC-150 Polaris fleet. The
contract has two five-year option periods which, if exercised,
would bring the value of the contract to $669 million.
Per the contract, the company will be responsible for overall
program management, material management, engineering support,
flightline maintenance, heavy maintenance, and component
maintenance, repair and overhaul services of the CC-150 aircraft.
The company had originally received a contract from the Canadian
government to provide complete ISS for the Department of National
Defence ("DND") CC - 150 'Polaris' Airbus fleet in Jun 2012.
The CC-150 aircraft is used by the DND for high-profile missions
such as VIP transportation and strategic air-to-air refueling, as
well as passenger, freight and medical evacuation transportation.
The company continues to expand its logistics solutions
capabilities internationally. This contract will provide
additional diversity to the company's Canadian military ISS
Last month, the company posted second quarter 2013 results with
top and bottom line beating the Zacks Consensus Estimate. L-3
Communications' revenue base is spread across a broad
diversification of programs. Over the longer run, we view the
company as one of the best-positioned pure defense players based
on its non-platform focus, broad diversification of programs and
its focus on shareholder value.
However, negative offsets include the loss of key contracts,
defense spending cuts and the lack of near-term catalysts. The
company presently retains a short-term Zacks Rank #3 (Hold).
Among the stocks worth considering in the space are
Lockheed Martin Corp.
Northrop Grumman Corp.
). While Raytheon carries a Zacks Rank #1 (Strong Buy), Lockheed
Martin and Northrop Grumman hold a Zacks Rank #2 (Buy).
L-3 COMM HLDGS (LLL): Free Stock Analysis
LOCKHEED MARTIN (LMT): Free Stock Analysis
NORTHROP GRUMMN (NOC): Free Stock Analysis
RAYTHEON CO (RTN): Free Stock Analysis Report
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