Orbital ATK OA announced that it has successfully clinched the first full-rate production (FRP) contract for its all-electronic FMU-167/B Hard Target Void Sensing Fuze (HTVSF).
The $23 million award has been contracted through the U.S. Air Force, and is a follow-on FRP order to the low-rate initial production contract in 2016.
What is HTVSF?
Orbital ATK developed the all-electronic FMU-167/B, recognizing the need to fulfill a specialized and growing demand for penetrating weapons. As such, the HTVSF is an advanced technology with an intelligent, cockpit programmable fuze capable of destroying hard and deeply buried targets.
It is capable of such an action with the help of advanced sensors, robust algorithms and hardened electronics technology that aid in improved performance against tactical targets. It provides multiple delay arming and detonation times, as well as a void-sensing function, which also allows precision activation of the fuze.
Orbital ATK’s Contracts & R&D
Orbital ATK currently boasts of over 100 major development and production programs that assure a steady revenue stream and inflow of new contracts. In the third quarter, the company invested $70 million in R&D and capital equipment. Notably, such continual investments will certainly help the company to come out with new products and upgrade existing ones to meet growing demand.
Thanks to the company’s diverse product offering, it continues to win several contracts from its wide customer base. In third-quarter 2017, the company received $1,435 million in new firm and option orders. As of Sep 30, 2017 Orbital ATK’s total backlog was nearly $15.7 billion (up 3% year over year), out of which, firm backlog was $9.6 billion (up 5% year over year).
Per managements opinion, yields from the conclusion of the aforementioned FRPcontract will help the company to progress further on building what they believe is a key capability for armed forces and allies.
Our Opinion
Widespread geo-political and socio-economic tensions have been bolstering growth of the aerospace and defense industry for decades now. In recent times, escalating international terrorist attacks and emergence of civil wars like those in the Middle East have been adding more impetus to the space. Impressively, stocks in the Zacks Aerospace sector (a stand-alone sector) have rallied 36.7% in the last 12 months, significantly outperforming the S&P 500’s 19.3% gain.
With a majority of macroeconomic factors favoring this sector, such outperformance can be expected to continue in the coming days. Further, given the increase in cyber attacks, terror threats and geopolitical instability, there is a pressing need to boost security and defense by all countries.
Notably, major defense contractors in the nation like Orbital, AeroVironment, Inc. AVAV, and Rockwell Collins, Inc. COL are also trying their best to make the most of this opportunity and expand worldwide.
Further, Orbital ATK has entered in an agreement to be acquired by Northrop Grumman Corporation NOC for a sum of $9.2 billion. This deal was announced in September 2017 and is expected to close in the first half of 2018.
Price Performance
Orbital ATK’s stock has returned 47.7% in a year, outperforming the 30.4% rally of the industry it belongs to.
.jpg)
Zacks Rank
Orbital ATK carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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