Kaman Corporation’s (KAMN) aerospace division received a contract modification from the U.S. Air Force worth $28.9 million. The deal has raised the value of the company’s Joint Programmable Fuzes contract with the U.S. Air Force to $ 90 million. Additionally, Kaman Aerospace has been rewarded a contract expansion by Bell Helicopter. The extension has augmented the value of the contract to over $24 million. Both deals signify Kaman Corporation’s prowess as the leading integrated aerostructure supplier in the market.
The Bell Helicopter Contract
Bell Helicopter has extended its three-year contract with Kaman Corporation for manufacturing the skin-to-core apparatus of its numerous marketable helicopter models. As per the deal, Kaman Corporation’s Aerospace segment will produce the helicopter components at its Bloomfield manufacturing plant in Connecticut. The growing scope of this deal will serve to enhance Kaman Corporation’s brand recognition across the global aerospace and defensive product industry.
The Joint Programmable Fuze Contract
The U.S. Air Force recently awarded a contract modification to Kaman Corporation’s Aerospace business division. The contract calls for the procurement of Joint Programmable Fuzes under Option 11 in 2015 or 2016.
Joint Programmable Fuzes are bomb fuzes used by the U.S. military. The modification deal signifies that Kaman Corporation is capable of satisfying the demand for such highly functional and reliable fuzes, aiding modernization of the defensive capability of U.S. military. With the deal announcement, Kaman Corporation has increased the programs’ backlog value to $131 million.
Moving Forward
Kaman Corporation manufactures and sells different types of aerospace and defense products. Since its inception in 1945, the company has remarkably improved its goodwill in the market with superior non-imitable product and service offerings. In 2002, Kaman Corporation acquired a monopolized status for supplying Joint Programmable Fuzes to the U.S. Air Force. Though primarily used in bombs, these fuzes also form part of other defensive weapons of U.S. military.
Furthermore, Kaman Corporation is the largest supplier of integrated aerostructural components, offering diversified aerostructure solutions such as designing, tooling, supporting, manufacturing and testing.
The new contract amendments will likely enhance its revenue and earnings in the upcoming quarters. However, certain uncertainties in the market or industry might offset the positives of such deals.
Considering that benefits from the new contracts are yet to be reaped, Kaman Corporation currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks worth considering in the industry include Blount International Inc. (BLT), The Babcock & Wilcox Company (BWC) and Barnes Group Inc. (B). While Blount International sports a Zacks Rank #1 (Strong Buy), both Babcock & Wilcox Company and Barnes Group carry a Zacks Rank #2 (Buy).
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