The Integrated Weapon Systems Division of Alliant Techsystems Inc. (ATK) has received a contract for producing multiple variants of 20mm PGU-series ammunition. The contract awarded by the U.S. Army is worth over $58.7 million.
Under the contract, Alliant will produce a wide range of PGU-type ammunitions including PGU-27A/B Target Practice (TP), PGU-30A/B Target Practice-Tracer (TP-T), PGU-28A/B Semi-Armor Piercing High Explosive Incendiary (SAPHEI) ammunition, a PGU-28A/B SAPHEI and PGU-30A/B TP-T linked configuration, and a PGU-27A/B TP and PGU-30A/B TP-T linked configuration.
The PGU cartridges are used on the U.S. Air Force's F-15 and F-16 aircraft, the U.S. Navy and Marine Corps F-18 aircraft, and the U.S. Marine Corps Cobra AH-1 helicopter.
This is the third contract award for Alliant under the U.S. Army’s contract signed in 2008. The company expects the total value of the contract to exceed $170 million by 2013, if all options under the contract are exercised.
Based in Mesa, Arizona, Alliant’s Integrated Weapon Systems wing will carry out the works under the contract at the Lake City Army Ammunition Plant in Independence, Missouri. The company expects to begin delivering the rounds in 2012.
Alliant’s suite of 20mm ammunition provides cost-effective, ballistically-matched training rounds for improved warfighter performance, as well as tactical rounds that offer the accuracy, lethality and penetration capabilities necessary to effectively address threats.
This contract reinforces Alliant’s position as a preferred provider of medium-caliber ammunition solutions. The company remains committed to providing the broadest offering of highest quality ammunition to the U.S. and allied forces worldwide.
Minneapolis, Minnesota-based Alliant Techsystems Inc. is a premier aerospace and defense company supplying products to the U.S. government agencies, and its prime contractors and sub-contractors. The company also supplies ammunition and related accessories to law enforcement agencies and commercial customers.
Alliant Techsystems presently retains a short-term Zacks #2 Rank (Buy). However, we maintain our long-term Neutral recommendation on the stock due to the concerns lingering over concentration of contracts from the U.S. Government and NASA and their influential budgets, which may affect the company’s bottom and top lines.
On a competitive landscape, the company ranks better than its peers Raytheon Co. (RTN) and Northrop Grumman Corporation (NOC), who carry a Zacks #3 Rank (Hold).
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