Huntington Wins 7th NSC Deal - Analyst Blog
18 Juin 2013 - 12:05AM
Zacks
The Ingalls Shipbuilding unit of Huntington Ingalls
Industries (HII) received a contract from the U.S. Coast
Guard to build the seventh National Security Cutter (NSC).
The $76.8 million contract will allow Huntington Ingalls to
purchase material and components to support construction of the new
cutter, Kimball (WMSL 756), at its shipyard in Pascagoula.
At a length of 418 feet and a beam of 54 feet, NSC is the biggest
and most technologically advanced class of cutters in the U.S.
Coast Guard shipyard. The cutter is intended to substitute the
Hamilton-class cutters built in the 1960s. It is equipped for
maritime homeland security, law enforcement, marine safety,
environmental protection and national defense missions. It plays a
major role in boosting the Coast Guard's operational promptness,
capacity and effectiveness.
Huntington Ingalls has already procured three NSCs for the Coast
Guard and two additional cutters are under construction at its
Pascagoula unit. The company’s fourth NSC − Hamilton (WMSL 753) −
is expected to launch by the end of 2013 and is 39% complete. It
has also recently performed the keel laying ceremony of the fifth
cutter, James (WMSL 754), which is about 16% complete.
Last month, Huntington Ingalls received a $487.1 million
fixed-price incentive firm target contract to provide the U.S.
Coast Guard with a sixth cutter. The company plans to begin the
construction on its sixth cutter, Munro (WMSL 755), later this
year.
Lockheed Martin Corporation (LMT) has collaborated
with Huntington Ingalls to provide the latter command, control,
communications, computers, intelligence, surveillance and
reconnaissance (C4ISR) capabilities. Huntington Ingalls remains
enthusiastic about its alliance with the defense Goliath.
The largest military shipbuilder in the U.S., Huntington Ingalls is
the prime industrial employer in Virginia. Huntington Ingalls,
originally an affiliate of Northrop Grumman
Corporation (NOC), was spun off in Mar 2011. It operates
major shipyards in Louisiana, Mississippi and Virginia.
Recently, Ingalls Shipbuilding received a fixed-price incentive
10-year contract worth $3.33 billion from the U.S. Navy for the
construction of five Arleigh Burke-class destroyers (DDG 51s). The
contract also carries an option for engineering change proposals,
design budgeting requirements and post-delivery availabilities of
these ships. If the option is implemented, the value of the
contract would go up to $3.39 billion.
Huntington Ingalls presently retains a short-term Zacks Rank #3
(Hold). We presently prefer Erickson Air-Crane Inc
(EAC) with a Zacks Rank #1 (Strong Buy).
ERICKSON AIR-CR (EAC): Free Stock Analysis Report
HUNTINGTON INGL (HII): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis Report
NORTHROP GRUMMN (NOC): Free Stock Analysis Report
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