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Alliant Techsystems Nurtures Domestic, Overseas Alliance - Analyst Blog

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On Dec 3, we have issued an updated research report on Alliant Techsystems Inc. ( ATK ). The company works closely with the National Aeronautics and Space Administration (NASA), the U.S. Department of Defense (DoD) and international defense establishments leading to a steady flow of contracts, thereby boosting its top line.

However, we believe interruptions in supply of raw materials and higher expenses at the commercial aerospace business might challenge Alliant Techsystems' future performance.

This Zacks Rank #3 (Hold) stock's second-quarter fiscal 2015 adjusted earnings per share surpassed the Zacks Consensus Estimate while revenues missed the same. On a year-over-year basis, both the top and bottom lines increased primarily due to higher sales resulting from strong contribution from all segments. In addition, lower pension expenses also boosted reported earnings.

Alliant Techsystems provides reliable and timely products and solutions for NASA's space missions. Recently, the company completed a critical design review for NASA's Space Launch System booster. Alliant is working on a merger of its Aerospace and Defense Groups and Orbital Sciences Corp. ( ORB ).

In addition, Alliant Techsystems provides a range of ammunitions and tactical equipments to the U.S. DoD. The military utilizes these ammunitions to uphold national security as well as overseas operations.

Alliant Techsystems maintains a strategic partnership with several international allies, including Italy and Jordan. Along with its foreign counterparts Finmeccanica-Alenia Aermacchi and the Italian Air Force, the company completed the first stage of ground and flight testing of the MC-27J tactical transport aircraft.

Alliant Techsystems' research and development activities for expanding its portfolio will increase the inflow of contracts from the NASA, DoD and international customers.

Alliant Techsystems regularly pays dividends to shareholders. In the first six months of fiscal 2015, the company paid dividends worth around $20.4 million. This initiative helps the company to maximize shareholder value.

On the downside, the company's dependence on suppliers for raw materials is our major concern. Alliant Techsystems uses several raw materials including steel, aluminum and copper to manufacture its products. Disrupted delivery, delayed replacement and changing suppliers of raw materials might impact the company's future performance adversely.

Key Picks from the Sector

Some better-ranked stocks in the sector include Spirit AeroSystems Holdings, Inc. ( SPR ) and Teledyne Technologies Inc. ( TDY ), each carrying a Zacks Rank #1 (Strong Buy).

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ALLIANT TECHSYS (ATK): Free Stock Analysis Report

ORBITAL SCIENCE (ORB): Free Stock Analysis Report

SPIRIT AEROSYS (SPR): Free Stock Analysis Report

TELEDYNE TECH (TDY): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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