Textron's (TXT) Unit Secures $333M Contract From U.S. Army

Textron Inc.’s (NYSE:TXT) sub segment, Marine & Land Systems, recently secured a contract to procure up to 255 mobile strike force vehicles. The deal will also offer related fielding hardware and field representative services for system de-processing.

Valued at $332.9 million the contract has been awarded by the U.S. Army Contracting Command Warren, MI. Notably, work related to this agreement is anticipated to be completed by Oct 13, 2024.

Why Textron?

Textron Systems, under which Marine & Land Systems come, is known for its unmanned aircraft systems, advanced marine craft, armored vehicles, intelligent battlefield and surveillance systems, intelligence software solutions, precision smart weapons, piston engines, test and training systems as well as total life cycle sustainment and operational services.

Furthermore, the company’s geographically diverse network of aircraft, defense & intelligence along with industrial and finance businesses helps to counter any specific business-related risk. Headquartered in Wilmington, MA, Textron is well known worldwide for its most recognizable and valuable brand names such as Bell Helicopter, Cessna Aircraft Company, Jacobsen, Kautex, E-Z-GO and Greenlee.

In fact, Textron has a strong presence in diverse areas of business jets and other general aviation aircraft, helicopter, aircraft engines, golf carts, turf maintenance equipment, electronic test equipment and blow-molded fuel tanks as well.

Recently, the company reported third-quarter results wherein its earnings surpassed the Zacks Consensus Estimate by 4.8% and also increased 6.6% from the year-ago quarter. However, revenues missed the same by 1.5% but improved 7.2% from the year-ago figure.

With rising geopolitical tensions across the globe, Textron continues to witness increased demand for its combat-proven military aircraft and associated systems from the U.S. government as well as allied nations. More such contracts can be expected in near future, thanks to increasing global security threats, which in turn might significantly boost Textron’s revenue growth rate.

Price Movement

Textron has underperformed the broader industry in the last 12 months. The company’s current rate of return is 34.5% compared with the industry’s 52.7%.

This lacklustre performance might have been led by the company’s aviation business, which continues to exhibit dismal performance on account of lower military and commercial turboprop volumes.

Zacks Rank

Textron carries a Zacks Rank #4 (Sell). Better-ranked stocks in the aerospace and defense sector include Engility Holdings, Inc. (NYSE:EGL) , Boeing Company (NYSE:BA) and Northrop Grumman Corp. (NYSE:NOC) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Engility delivered an average positive earnings surprise of 23.50% in the last four quarters. The Zacks Consensus Estimate for current-year earnings has moved up 2.3% in the last 60 days.

Boeing pulled off an average positive earnings surprise of 13.67% in the last four quarters. The current-year earnings estimates have inched up0.7% in the last 30 days.

Northrop Grumman came up with an average positive earnings surprise of 12.60% in the last four quarters. Its 2017 earnings estimates have inched up 0.2% in the last 30 days.

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