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L-3 Communications Gets US Navy T-45 Maintenance Contract - Analyst Blog

By: Zacks.com
Posted: 7/3/2014 4:30:00 PM
Referenced Stocks: BA;GD;LLL;LMT

An L-3 Communications Holdings Inc. ( LLL ) unit, L-3 Communications Vertex Aerospace LLC, received a contract worth nearly $151.4 million to provide maintenance and logistic services for 200 T-45 aircraft based at Naval Air Station Meridian, MS; NAS Kingsville, TX; NAS Pensacola, FL and NAS Patuxent River, MD. The Naval Air Systems Command, Patuxent River, MD, is the contracting activity.

Contract Details

Per the contract, L-3 Communications will be entrusted with the duty to provide engineering, supply, procurement of associated parts and materials for approximately 200 T-45 aircraft based at these naval bases. The majority of the work will be done at the Texas and Mississippi bases.

The T-45 aircraft plays a significant role and is used for training pilots. The training program helps pilots to prepare for strike missions. Hence, keeping the T-45 aircraft in proper condition is the primary objective of this contact.  L-3 Communications is expected to complete the work by Sep 2015.

Recap of Past Performance

L-3 Communications is a steady performer, registering earnings surprises in the last four quarters with an average beat of 4.4%. Despite the ongoing threat of U.S. defense budget cuts, L-3's diverse product portfolio helps it to win defense deals at regular intervals.

We believe the company's ability to timely execute its programs, cost cutting initiatives and contributions from strategic acquisitions will sustain its financial performance.

Zacks Rank

L-3 Communications carries a Zacks Rank #3 (Hold). Investors interested in the aerospace and defense industry may however consider stocks like Lockheed Martin Corporation ( LMT ), The Boeing Company ( BA ) and General Dynamics ( GD ). All these stocks carry a Zacks Rank #2 (Buy).


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