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iRobot Secures Multi-Year Canadian Defense Contracts

Zacks Equity Research

Robot maker iRobot Corporation (IRBT) announced that it has been awarded multi-year contracts by the Canadian Department of National Defence (DND.TO). The contracts, with an initial value of $9.6 million, will be a booster for the company’s Defense and Security Robots segment.

Per the terms of the contracts, iRobot will deliver 20 iRobot 510 PackBot CBRN Recce Systems by Apr 2015. These robots, a modular expansion of iRobot’s 510 PackBot Multi-Mission robot platform, are equipped with sensors to detect chemical warfare agents, toxic industrial chemicals, volatile gases, explosives and radiation.

In Apr 2014, iRobot secured a $59.2 million contract from the Department of Defense (DoD) to supply Man Transportable Robotic System (:MTRS) production systems by Apr 2015. The MTRS is predominantly used by explosive ordnance disposal technicians for diffusing explosive devices. Along with this, the company will provide spare kits, depot repair services, depot level repair parts, parts supply, training, configuration management, approved accessories and engineering enhancements.

Such contracts have strengthened iRobot’s revenue generation capabilities. In second-quarter 2014, the company’s revenues increased 7.2% year over year to $139.8 million, with the Defense & Security segment contributing $5.1 million.

For 2014, iRobot anticipates revenues to be within $555−$565 million and earnings in a range of $1.10−$1.20 per share. In the third quarter, revenues and earnings are estimated in a range of $133−$136 million and 32−35 cents per share.  

The Zacks Consensus Estimate for iRobot Corp. is pegged at $1.14 for 2014 and $1.37 for 2015, representing year-over-year growth of 30.7% for 2014 and 20.8% for 2015.

With a market capitalization of $977 million, iRobot Corp. currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Lockheed Martin Corp. (LMT), Electrolux AB (ELUXY) and The Middleby Corp. (MIDD). All these stocks hold a Zacks Rank #2 (Buy).

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