FLIR Systems Clinches Land Surveillance Systems Contract

Sensor systems maker FLIR Systems, Inc. FLIR recently clinched a firm-fixed-price order worth $74.7 million to deliver TacFLIR surveillance cameras in support of the U.S. Army EO/IR-Force Protection (FP) program. The program offers enhanced perimeter security and force protection for U.S. troops stationed across the world.

Per the order, the U.S. Army will purchase the systems through Army Contracting Command, Redstone. Under the same program, FLIR Systemshad secured an $8.8-million contract in third-quarter 2017, which required it to deliver other FLIR Ranger radars.  

As part of this program, the company has delivered more than a thousand of these EO/IR sensors to the U.S. Army, including a variety of systems. The recent award substantiates its proven ability to rapidly deploy its technology for critical missions, as well as validates the effectiveness of its commercially developed, military qualified approach.

The systems will be manufactured in Wilsonville, OR, with deliveries commencing in 2017 and scheduled to be completed in a year.

FLIR Systems recently streamlined its operating structure to leverage its vertical integration as well as focus on core markets. The company has realigned six of its segments, namely OEM & Emerging Markets, Surveillance, Instruments, Security, Detection and Maritime into three units. The new segments will be called Government & Defense, Industrial and Commercial.

Restructuring activities undertaken by the company since 2013 have helped the company reap synergies and drive profitable growth, combating headwinds like currency fluctuations and tough market conditions.

Quarter to date, FLIR Systems’ shares have returned 5.4%, outperforming the industry’s average gain of 2.6%. This Zacks Rank #3 (Hold) company’s solid execution and streamlined business have helped it drive improvements in backlog, margins, and net income, in recent times.

We believe strategic restructuring activities and solid backlog levels indicate the company’s resiliency, which will enable it to sail through difficult economic times and drive growth. It should be noted that brokers are on the sidelines for the stock as its earnings estimates remained unchanged over the month. The Zacks Consensus Estimate for 2017 also remained steady at $1.85 over the same time frame.

Zacks Rank & Stocks to Consider

Some better-ranked stocks in the industry are Engility Holdings, Inc. EGL, L-3 Communications Holdings, Inc. LLL and Huntington Ingalls Industries, Inc. HII. While Engility Holdings sports a Zacks Rank #1 (Strong Buy), Huntington Ingalls and L-3 Communications carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Engility Holdings has a striking earnings surprise history for the trailing four quarters, beating estimates all through. It boasts an average positive surprise of 23.5%.

L-3 Communications has an average positive surprise of 9.7%, beating estimates all through.

Huntington Ingalls has an average positive surprise of 8.6% over the trailing four quarters, beating estimates twice for as many misses.

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