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Textron (TXT) Wins $146.6M Aircraft Repair Order From Navy


Textron Inc. TXT announced that its Bell segment has been awarded $146.6 million long-term repair order from Naval Supply Systems Command Weapon Systems Support, Philadelphia, PA.

Per the term of the contract, Textron will repair 35 items used on the UH-1Y and AH-IZ aircraft. The project will be carried in the company’s Fort Worth, TX facility. Work related to this deal is expected to be over by June 2019.

The company will not receive any immediate fund at the time of the order. Funds will be allocated as and when individual orders are issued.

About UH-1Y and AH-IZ Aircrafts

The Bell UH-1Y, also known as Super Huey is a twin-engine combat-proven utility helicopter slated to support the U.S. Marine Corps global missions. Initially, these helicopters were remanufactured from UH-1Ns. But in 2005, it received approvals to be built as separate units.

Based on the AH-1W SuperCobra, the Bell AH-1Z Viper is a twin-engine attack helicopter, primarily developed for the U.S. Marine Corps under the H-1 upgrade program.

Bell Segment Performance

In the first quarter of 2017, the segment reported revenues of $697 million, down from the year-ago level of $814 million. Though there was a drop in the revenue, the segment managed to deliver a profit of approximately $1 million.

Though the Bell segment remains a drag to Textron’s topline, the company’s geographically diverse network of aircraft, defense & intelligence, industrial and finance businesses keep adding to its growth.

Previous Notable Orders

Earlier in Feb, 2017, Textron announced that Bell segment clinched a $423.4 million modification contract from the U.S. Navy. Per the agreement, Textron was required to manufacture and deliver 14 AH-1Z aircraft from this model’s latest lot. (Read more: Textron's Bell Helicopter Wins $423.4M Deal for H-1 Program)

In January, Textron Systems Support Solutions received a contract from the U.S. Army to provide Contractor Logistics Support (CLS) for the Shadow Tactical Aircraft System (TUAS). The contract was valued at $206 million. (Read more: Textron Unit Wins $206M Deal for Shadow TUAS Sustainment)

Price Movement

In the last one year, shares of Textron have gained 22.1%, underperforming the Zacks categorized Aerospace/Defense industry’s gain of 26.7%. The stock has also underperformed when compared with its peers like The Boeing Company BA and General Dynamics Corp. GD, both of which have outperformed the industry’s return last year.

The uncertainties faced by the company include global politics along with intense competition from its peers. The above might have impacted Textron’s performance negatively.

Zacks Rank and Other Stock to Consider

Textron currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the same space is Northrop Grumman Corporation NOC sporting a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Northrop Grumman delivered a positive surprise of 25.17% in the first quarter of 2017. Its 2017 Zacks Consensus estimate moved up nearly 14.1% to $12.31 per share in the last 90 days.

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