Aerospace products manufacturer Kaman Corporation (KAMN) announced that its Aerospace segment has recently won a contract modification for the procurement of Joint Programmable Fuzes. An extension of Kaman’s Option 11 contract with the U.S. Air Force, this deal is valued at $8.5 million, increasing the present worth of the entire contract to $50.4 million. Delivery of the fuzes will take place in 2015 and 2016.
The follow-on order, with a backlog of $117 million, strengthens the company’s outlook for its largest single program. Kaman has been the sole provider of fuzes for the U.S. Air Force since 2002, reflecting the government’s strong confidence on its performance.
The fuze, capable of programming the settings of a weapon on wing in flight, is the U. S. Air Force’s current bomb fuze of choice. These fuzes are manufactured in Orlando, FL and Middletown, CT-based facilities of the company.
Kaman’s Aerospace segment has been performing well in the recent past, resulting in improved total revenue. In the first quarter of 2014, the segment sales increased 14% year over year to $149 million, mainly led by a hike in shipments of Joint Programmable Fuzes and increased volume on certain composite structure programs. For 2014, the Aerospace segment is expected to record sales in the range of $640–$660 million, while operating margins are anticipated in the 16.5–17.0% range.
With a market capitalization of $1.2 billion, Kaman holds a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Blount International Inc. (BLT), EnPro Industries, Inc. (NPO) and Broadwind Energy, Inc. (BWEN). While Blount International and EnPro Industries sports a Zacks Rank #1 (Strong Buy) each, Broadwind Energy holds a Zacks Rank #2 (Buy).