Derco Aerospace, Inc., a part of United Technologies Corporation (UTX) under the Sikorsky segment, was selected by Tronair – a maker of ground support equipment for the global aviation market – as the latter’s exclusive channel partner for the military aftermarket.
Per the three-year agreement, Derco Aerospace will be responsible for the marketing of Tronair's products, which include ground power and hydraulic units, servicing products, jacks, stands, electrical stands, etc. The deal is expected to unlock value for international operators and MRO (Maintenance, repair and overhaul) facilities as it will leverage Derco's strong presence in the military aftermarket for Tronair’s reputable product portfolio.
Derco Aerospace also renewed a distribution agreement with UTC Aerospace Systems, which is a segment of United Technologies. Per the agreement, Derco Aerospace will support the VPV 54H60 Propeller Program that UTC Aerospace Systems recently won from the U.S. Defense Logistics Agency.
Additionally, UTC Aerospace Systems chose Derco Aerospace as the original equipment manufacturer (OEM) authorized repair facility for its military wheel and brake component repairs.
United Technologies is presently in the spotlight as its CEO and Chairman Louis Chenevert retired abruptly on Sunday, which came as a surprise for the investment community. Gregory Hayes, CFO of United Technologies for the past six years, will take over the reins of the company as it grapples with slowing Chinese real-estate markets, weak macro conditions in Europe and pressurized margins.
While many questions remain unanswered about the hasty leadership transition, the conglomerate is also facing challenges in most of its business segments. It is striving to boost its slowing Otis elevator business in China, and is on the verge of launching a major new engine program in Pratt & Whitney, which is combating rising competition from peers like General Electric Company (GE), Honeywell International Inc. (HON), and Rolls Royce.
United Technologies currently sports a Zacks Rank #3 (Hold). A better-ranked conglomerate that is worth a look now is Federal Signal Corp. (FSS), holding a Zacks Rank #1 (Strong Buy).
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