Textron's Bell Unit Wins Deal to Build 412EP Helicopters

Diversified manufacturer Textron Inc.'s TXT Bell segment has clinched a contract to produce and deliver four Bell 412EP helicopters. Work related to this deal is scheduled to be over by Nov 30, 2017.

Valued at $27.2 million, the contract was awarded by the U.S. Army Contracting Command, Redstone Arsenal, AL. Fiscal 2017 other funds will be utilized to execute the work at the facility at Fort Worth, TX.

A Brief Note on 412EP Helicopter

Bell 412 EP is a twin-engine utility helicopter that can execute missions both during day and at night by reliably performing in some of the most extreme climates around the world every day. Its spacious cabin provides multi-mission flexibility and can accommodate up to 14 passengers.

The chopper is powered by PT6T-3D Twin Pac Engines of Pratt & Whitney – a unit of United Technologies, Corp. UTX. The baggage compartment in its tail boom can be easily configured to board a variety of mission-specific equipment.

What's Favoring Textron?

Although Textron's Bell segment continues to be a drag on its top-line performance, the company's geographically diverse network of aircraft, defense and intelligence, industrial, as well as finance businesses negates any specific business risk.

Moreover, at the Bell segment, the company witnessed substantial progress in its V-22 tiltrotor aircraft program during first-quarter 2017, as a result of which a 6% improvement was observed in this program's revenue. In terms of innovation, Textron is currently co-developing 150 UH-X helicopters with Japanese automobile company, Subaru Corp. FUJHY – formerly known as Fuji Heavy Industries, Ltd. Deployment of this militarized version of Bell's 412EP1 model will begin in 2021 and will replace the aging fleet of Bell Hueys.

The launch of new products, higher deliveries of V-22 model and strong foreign initiatives for its helicopters are expected to drive contracts for Bell segment's products in 2017. The recent deal seems to be one among many such contracts.

Price Movement

Textron has underperformed the Zacks categorized Aerospace–Defense industry over the last 12 months. The company's shares have risen 22.4% compared with the industry's gain of 28.3%. The stock's underperformance might have been induced by the consistent weak performance demonstrated by Textron Aviation business segment. Also, the company faces intensified competition from some of the top-raking defense behemoths in the industry like Lockheed Martin Corp. LMT.

Zacks Rank

Textron currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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Lockheed Martin Corporation LMT: Free Stock Analysis Report
 
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United Technologies Corporation UTX: Free Stock Analysis Report
 
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