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L-3 Communications Secures $163M Navy Contract for T-45

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A L-3 Communications Holdings Inc. LLL unit, L-3 Communications Vertex Aerospace LLC has won a modification contract, worth $163.3 million, from the U.S. Navy to provide support services. The contract was awarded by the Naval Air Systems Command, Patuxent River, MD.

Details of the Deal

Per the modification, L-3 Communications will provide organizational, intermediate and depot-level maintenance and logistics services for about 200 T-45 aircraft at the Naval Air Station (NAS) Meridian, MS; NAS Kingsville, TX; NAS Pensacola, FL; and NAS Patuxent River, MD.

L-3 Communications will be responsible for providing services for sustaining engineering, supply and government property management, and procuring related parts and materials essential to set up the aircraft for about 320 launchers daily across the four sites, with a total projected flying capability of 75,000 hours annually.

Work is scheduled to be complete by Sep 2017 and the majority of the work will be performed in Kingsville, while the rest will be carried out in Meridian, Pensacola, and Patuxent River.

L-3 COMM HLDGS Price

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The T-45 Aircraft

Manufactured jointly by the Boeing Company BA and BAE Systems plc BAESY, T-45 is the Navy's advanced jet trainer for the U.S. Navy and U.S. Marine Corps with twin-seating capacity. This aircraft was selected to replace the TA-4J Skyhawk and T-2C Buckeye in order to meet its requirement for an undergraduate jet pilot trainer.

Since the T-45 plays an important role in training pilots for strike missions, the latest contract aims to make sure that the Navy’s T-45 fleet is in perfect condition.

About L-3 Communications

L-3 Communications is one of the prime system contractors for aircraft modernization and maintenance; Intelligence, Surveillance & Reconnaissance (“ISR”) collection platforms; simulation and training; and government systems support services.

The company is transforming its business portfolio to focus better on defense electronics, communications and ISR markets, wherein it already enjoys a leading position.

Zacks Rank & Key Picks

L-3 Communications currently has a Zacks Rank #3 (Hold). Investors interested in the aerospace and defense space may consider General Dynamics Corporation GD, which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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