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AAR Corp (AIR) Wins $49M Army Contract for NGATS Shelters

Zacks Equity Research
Updated

AAR Corp.’s AIR unit, Mobility Systems, has won a contract from the U.S. Army to supply automatic test equipment and storage shelters for its Next Generation Automatic Test System (“NGATS”). The upper limit of the contract is $49.0 million for five years. Contracting activity is Army Contracting Command, Picatinny Arsenal, NJ.

The company received a first delivery order, worth $2.5 million, which will comprise the first article units for two shelter variants, in addition to production units. Mobility Systems will design the shelters and manufacture in a facility located in Goldsboro, NC.

Per the contract, AAR Corp will design, test and manufacture two types of 20-feet ISO shelters to support the NGATS. This includes a maintenance shelter to accommodate the test system –the Automatic Test Equipment (ATE) shelter – and the NGATS storage shelter to store essential system-specific hardware for testing system components.

On Feb 2016, the company launched a new business segment, Rotorcraft Services, to provide a wide range of aftermarket support services for helicopter operators. With the addition of this division, AAR Corp will be able to further expand its market, while rotor-wing operators will enjoy access to the full range of services provided by the company to its fixed-wing customers across over 100 countries.

AAR has maintained a satisfactory competitive position on the back of its market expertise as well as technical and financial capabilities. The company expects its supply chain to see strong growth and continued demand in the MRO businesses, driven by its strong position in the thriving global aviation services market.

Zacks Rank & Key Picks

AAR Corp. currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include HEICO Corporation HEI, AeroVironment, Inc. AVAV and Spirit AeroSystems Holdings, Inc. SPR. While HEICO Corporation sports a Zacks Rank #1 (Strong Buy), both AeroVironment and Spirit AeroSystems carry a Zacks Rank #2 (Buy).

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AAR CORP (AIR): Free Stock Analysis Report
 
SPIRIT AEROSYS (SPR): Free Stock Analysis Report
 
AEROVIRONMENT (AVAV): Free Stock Analysis Report
 
HEICO CORP (HEI): Free Stock Analysis Report
 
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