EAC Gets Firefighting Contract

Zacks

Heavy-lift helicopter manufacturer Erickson Air-Crane Inc. (EAC) received an exclusive firefighting services contract from the US Forest Service (“USFS”). Per the contract, the company will provide aerial firefighting services using one of its heavy-lift Aircrane helicopters. This is a precautionary measure taken by the federal authority ahead of the upcoming forest fire season.

Erickson Air-Crane will have one of its heavy duty helicopters stationed in Boise, Idaho, which will be pressed into action whenever there is a distress call. Erickson Air-Crane’s expertise in handling such extreme situations helped it to get this new exclusive contract.

The company has a long working relationship with USFS. This new contract increases the total exclusive contract count between the two parties to eight. Like the other contracts USFS might extend this contract for another three years.

The company’s able firefighting crew with proven expertise makes it a preferred choice over its peers. In May 2012, the company was awarded a $44 million, three-year contract by the NATO Maintenance and Supply Agency ("NAMSA") to provide aerial firefighting services in Greece.

Erickson Air-Crane generates the majority of its revenue from its Aerial Services. In the first quarter 2012, revenue generated from this segment was $25.1 million (91% of revenue) while the Manufacturing division contributed the rest. The success of Aerial Services is guaranteed given its run of recent contract wins.

The company reiterated its earnings per share expectation for 2012 in the range of 72 cents to 82 cents. The Zacks Consensus Estimate for 2012 is 69 cents.

Erickson Air-Crane currently retains a Zacks #3 Rank (short-term Hold rating). The company competes with the likes of Embraer SA (ERJ) and Northrop Grumman Corporation (NOC) in the defense niche.

Based in Portland, Oregon, Erickson Air-Crane is the manufacturer of a powerful heavy-lift helicopter, Erickson S-64 Aircrane. The company also operates a fleet of heavy helicopters and provides a variety of services to the US government and its worldwide customers. Its service offerings include firefighting, timber harvesting, infrastructure construction, and crewing.

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