) unit Textron Marine & Land Systems has been awarded a
contract modification by the U.S. Army Contracting Command to
continue providing training and logistics support to the
Afghanistan National Army ("ANA"). The cost-plus-fixed-fee contract
modification authorizes initial funding of $14.95 million.
This contract was originally awarded in May 2011 and had a
potential value of $30.51 million, if all options were exercised.
The options included funding for vehicle deprocessing field service
representatives, instructors, interpreters and in-theatre
management, and other direct costs for an additional one-year
Mobile Strike Force Vehicles ("MSFVs") are upgraded versions of
the combat-proven M1117 Armored Security Vehicle ("ASV"), and are
configured with Enhanced Survivability capability. These vehicles
have V-shaped hull design and provide improved blast protection and
mine-resistant capability along with strong ambush-protected
Earlier in June 2011, Textron received a contract, worth $257
million including initial funding of $125.9 million, from the U.S.
Army Contracting Command to manufacture up to 440 Medium ASVs for
the ANA. The company has already started full-rate production of
240 MSFVs last year and the first MSFVs arrived in Afghanistan in
February. The option contract adds 200 more vehicles and includes
the company's last contract with the U.S. Army Contracting Command
to supply 71 MSFVs to the ANA.
We view Textron Inc. as an organization with a geographically
diverse network of aircraft, defense & intelligence, industrial
and finance businesses. Currently, it is focusing on its core
manufacturing business and making a gradual exit from its
commercial finance business.
But at the same time, we are skeptical about lower backlog at
Cessna, the rate of recovery of the business jet market, and
defense spending cutbacks.
Textron Inc. currently retains a Zacks #4 Rank, which translates
into a short-term Sell rating. Over the longer run, we are Neutral
on the company. The company competes with
General Electric Company
United Technologies Corporation
Providence, Rhode Island-based Textron Inc. is a global
multi-industry company that manufactures aircraft, automotive
engine components, and industrial tools. It is also a provider of
solutions and services for aircraft, fastening systems, and
industrial products and components.
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