FLIR Systems Inc. FLIR recently won a five-year indefinite delivery, indefinite quantity (‘IDIQ’) contract worth $51.1 million from the U.S. Department of Defense. However, market responded meekly to this major contract win and shares of the company went down by about 0.27% during the regular trading session on Apr 10.
Coming to the news, this production contract entails FLIR Systems to support nuclear, biological and chemical Dismounted Reconnaissance Sets, Kits and Outfits (DR SKO) program of the U.S. Defense authorities.The DR SKO agenda commenced in 2008, when the U.S. Defense Department started to utilize the CBRNE (chemical, biological, radiological, nuclear and explosives) threat recognition arrangements of FLIR Systems in the country’s Air Force, Civil Support Teams, Army and Navy.
The contract-related manufacturing activities would take place in the company’s Elkridge facility in Maryland. The modern CBRNE threat detection tools of FLIR Systems would benefit the U.S. Department of Defense by backing the protection system of both citizens and militaries of the country. The delivery order is expected to take place between Sep 2015 to Apr 2016.
Bottom-Line
Although the initial sentiment of investors on the news was discouraging, we believe the contract win bodes well for FLIR Systems’ and will bolster its growth momentum.
As a matter of fact, the above-mentioned defense deal is the second full-rate production contract won by FLIR Systems from U.S. Defense officials. The company got the first full-rate production order in December last year (read more: FLIR Systems Procures $27M Defense Deal).
FLIR Systems currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the industry include Apple Inc. AAPL, API Technologies Corp. ATNY and L-3 Communications Holdings Inc. LLL. While Apple Inc. sports a Zacks Rank #1 (Strong Buy), both API Technologies and L-3 Communications carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment