L3 Technologies Wins $69M Deal To Support CSS VSAT System

L3 Technologies, Inc. (NYSE:LLL) recently clinched a modification contract worth $69 million to test, inspect and repair components of the Combat Service Support (CSS) Very Small Aperture Terminal (VSAT) AN/TSC-183A system. The contract was awarded by the U.S. Army Contracting Command, Aberdeen Proving Ground, MD. Work related to the deal is scheduled to get completed by Sep 27, 2022.

A Brief Note on CSS VSAT System

L3 Technologies’ CSS SATCOM provides wideband Non-Secure Internet Protocol Router Network (NIPRNET) connectivity to all major sustainment nodes across the army. The CSS SATCOM enables deployed maneuver and support battalions to reach key sites located in the continental United States (CONUS).

The combination of CSS and VSAT increases readiness by giving CSS Soldiers the ability to electronically transmit supply requisitions in the field and receive near real time status reports on their orders, 24-hours-a day, seven-days-a-week.

What Favors L3 Technologies?

L3 Technologies' Communications & Networked Systems segment, which provides SATCOM systems and equipment along with other low-powered SATCOM products, recorded net sales of $734 million in the third quarter of 2018. We believe this latest contract acquired to support CSS VSAT System
will further boost the segment's performance.

Furthermore, Variant Market research firm expects the global SATCOM equipment market to witness significant growth over the 2017-2025 period,
owing to a rising number of underwater threats and attacks. By 2025, this market is projected to witness a CAGR of 8.6% to $39.61 billion from 2017. As a result of such favorable projections, L3 Technologies is expected to capture a sizeable share of this expanding market, going ahead.

Price Movement

In a year’s time, shares of L3 Technologies declined 12.8% compared with the industry’s fall of 8%. The underperformance can be attributed to weak performance the company has been witnessing lately in some of its product lines.

Zacks Rank & Stocks to Consider

L3 Technologies currently carries a Zacks Rank #3 (Hold).

A few better-ranked companies in the same sector are AeroVironment, Inc. (NASDAQ:AVAV) , The Boeing Company (NYSE:BA) and Heico Corporation (NYSE:HEI) .

While AeroVironment and Boeing sport a Zacks Rank #1 (Strong Buy), Heico carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AeroVironment came up with average positive earnings surprise of 257.01% in the last four quarters. The Zacks Consensus Estimate for fiscal 2019 earnings has increased 33.3% to $1.48 in the past 90 days.

Boeing came up with average positive earnings surprise of 28.01% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has
increased 4.47% to $18.22 in the past 90 days.

Heico’s long-term growth rate for the next 5 years currently stands at 12.10%. The Zacks Consensus Estimate for 2019 earnings has increased 4.00% to $2.08 in the past 90 days.

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