AAI Unmanned Aircraft Systems, a unit of
Textron Inc.
(
TXT
), has received the U.S. Navy's Intelligence, Surveillance and
Reconnaissance ("ISR") Services multiple-award contract with tenure
of over five years. The contract with the maximum value of $874
million is awarded to three companies. Textron Inc. numbers among
them.
The company's multi-mission capable Aerosonde Small Unmanned
Aircraft System ("SUAS") is the key reason for this award win. Per
the contract, the company will provide the Navy, Marine Corps and
Air Force with both land and sea-based unmanned aircraft systems
operations.
Besides having Expeditionary Ground Control Station for portable
command and control operations, the Aerosonde system uses one-piece
Launch and Recovery Trailer designed by AAI that helps in efficient
takeoff and landing. These features make it most suitable for
expeditionary land- and sea-based operations. Also, this Aircraft
System has a heavy-fuel engine that provides reliable performance
and has long survival capability that helps it in delivering
electro-optic/infrared ISR persistently.
Textron Inc. is a global multi-industry company that
manufactures aircraft, automotive engine components, and industrial
tools. It also provides solutions and services for aircraft,
fastening systems, and industrial products and components. It is
also a commercial finance company in select markets.
We believe that the company's diversified presence across
commercial, manufacturing and industrial products as well as
financing operations insulates it from specific business risk.
Going forward, we expect growth to be driven by strong performance
at Bell and at its industrial business. Also, its focus on the core
manufacturing business in tandem with a gradual exit from its
commercial finance business would aid profitability.
However, we are concerned about the lower backlog at Cessna, the
rate of recovery of the business jet market, and defense spending
cutbacks. The company presently retains a short-term Zacks #1 Rank
(Strong Buy). We have a long-term Neutral recommendation on the
stock.
The company mainly competes with
General Electric Company
(
GE
) and
United Technologies Corporation
(
UTX
).
GENL ELECTRIC (
GE
): Free Stock Analysis Report
TEXTRON INC (
TXT
): Free Stock Analysis Report
UTD TECHS CORP (
UTX
): Free Stock Analysis Report
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