AAR Corp. (AIR), the provider of aircraft parts and maintenance, announced that it has won a strategic five-year contract for providing lightweight, multi-purpose shelters (LMS). The value of the contract will be up to $14 million.
The durable LMS shelters will be used by the army to house and operate command and control equipment while helping them to create situational awareness and provide tactical support in various theaters of operation.
Furthermore, these shelters can be mounted on High Mobility Multi-Purpose Wheeled Vehicles and can be applied for various functions ranging from communications to controlling unmanned aircraft.
The work will be performed in Cadillac, Michigan, at AAR Corp.'s Mobility Systems manufacturing and integration facility.
AAR Corp. will be using advanced techniques for the manufacturing of the new LMS shelters. The techniques characterize friction stir welding and integrated electromagnetic shielding to house and isolate sophisticated battlefield systems.
The company will also provide 20' ISO shelters to the U.S Army for their mobile Petroleum Quality Analysis Systems (PQAS), supporting in-theater operations by testing and analyzing fuels. The value of this contract will be up to $10 million, with tenure of three years.
Wood Dale, Illinois based AAR Corp. delivered encouraging results for the fourth quarter and fiscal 2011, reporting earnings of $0.55 per share compared with $0.31 per share in the prior-year quarter. The result surpassed the Zacks Consensus Estimate of $0.46 per share.
The company expects positive trends in the commercial air transportation markets and strategic contract winnings going forward. It competes directly with its peers such as Goodrich Corp (GR), Boeing Co (BA) and Lockheed Martin Corporation (LMT).
We currently maintain a long-term Outperform recommendation on the stock. AAR Corp. has a Zacks #2 Rank, which translates into a short-term Buy rating (1-3 months).
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