The Integrated Weapon Systems Division of Alliant Techsystems Inc. (ATK) has received a contract worth $37 million from the United Kingdom's Ministry of Defense (“MoD”) for the supply of lightweight (LW) 30mm ammunition.
Lightweight 30mm ammunition has superior multi-role and multi-target defeat capabilities. It comprises the M788 TP (target practice) training round and the M789 High Explosive Dual Purpose (“HEDP”) tactical round. Both these rounds will support UK's fleet of AH-64 Apache Helicopters.
The two rounds of ammunition were originally developed and fielded for the M230 automatic cannon and the AH-64 Attack helicopter. The ballistically-matched M788 training rounds are cost-effective and enable improved warfighter performance in active theaters around the globe. Whereas the M789 HEDP round provides the accuracy and armor penetration capabilities that are necessary to effectively defeat the threats and are used for supporting operations in Iraq and Afghanistan.
Production of the LW30mm rounds will take place at the company's facilities in Rocket Center, West Virginia and Radford, Virginia with delivery expected to begin in early 2012.
Alliant Techsystems is a well diversified aerospace and defense contractor delivering products and solutions that are vital to the preservation of U.S. national security. The company continues to move ahead with its strategy of expanding in adjacent and international markets to drive growth and profitability. The company is looking for opportunities to expand into markets such as commercial aerospace structures attracted by the signs of upsurge in the OEM portion of the commercial aerospace market.
However, concerns linger 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. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock. In the near term, we would advise investors to accumulate its short-term Zacks #2 Rank (Buy rating) peer General Dynamics Corporation (GD).
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.
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