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Mercury (MRCY) Secures $50M US Navy Contract for Its ADTS
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Mercury Systems (MRCY - Free Report) recently announced securing a basic ordering agreement (“BOA”) worth $50 million from the Naval Air Systems Command. The order, received in the third quarter of fiscal 2022, has a period of performance of three years.
Per the BOA deal, Mercury will provide engineering services and products related to its Advanced Data Transfer System (“ADTS”) to be deployed across multiple rotary-wing and tilt-rotor platforms. The company’s ADTS is a rugged data, video and audio loader and recorder. The system has cybersecurity capabilities and is used for moving mission data securely to and from the aircraft for pre and post-mission analysis.
The terms of the contract cover MRCY’s ADTS hardware, including data transfer devices, data transfer units, encryption modules and other key components. The BOA deal requires the company to perform the task at its Torrance, CA facility.
The latest agreement showcases the credibility of Mercury's advanced assemblies across the defense sector. It reflects the company’s deep commitment to transforming the U.S Department of Defense while ensuring commercial technology’s availability across the sector.
Mercury has been steadily winning multiple development contracts from the defense department. Last week, it was awarded a $25-million contract by a leading defense prime contractor to support an electronic warfare application with its integrated high-performance radio frequency subsystems. The order is expected to be shipped over the next several quarters.
In April, the company secured three different defense contracts with a cumulative value worth approximately $38 million. In March, it secured a $165-million indefinite delivery/indefinite quantity contract from the U.S. Air Force to provide flight data recorders to support a secure mission data system of air services' F-16 fleet.
Mercury's total bookings at the end of the third quarter of fiscal 2022 were $295 million, reflecting a book-to-bill ratio of 1.17. The company ended the quarter with a backlog of $996 million, up $102.3 million from a year ago. From this backlog, products worth $637.6 million are expected to be shipped within the next 12 months.
Modernization in radar, EW and C4I is rapid, thus providing the company with new opportunities in weapon systems, space, avionics processing and mission computing and embedded rugged services.
Mercury's domain expertise in analog and digital integration has helped it build a solid business relationship with defense prime contractors.
However, pandemic-induced modernization delays and changes in administration and customer execution issues are likely to continue impacting the company's organic revenue growth in the near term.
Low-margin deals are likely to affect Mercury's profitability, despite the steady stream of development contracts from the federal government. Increased investments to expand the business might weigh on the bottom line.
Zacks Rank & Stocks to Consider
Mercury currently carries a Zacks Rank #3 (Hold). Shares of MRCY have declined 21.9% in the past year.
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Mercury (MRCY) Secures $50M US Navy Contract for Its ADTS
Mercury Systems (MRCY - Free Report) recently announced securing a basic ordering agreement (“BOA”) worth $50 million from the Naval Air Systems Command. The order, received in the third quarter of fiscal 2022, has a period of performance of three years.
Per the BOA deal, Mercury will provide engineering services and products related to its Advanced Data Transfer System (“ADTS”) to be deployed across multiple rotary-wing and tilt-rotor platforms. The company’s ADTS is a rugged data, video and audio loader and recorder. The system has cybersecurity capabilities and is used for moving mission data securely to and from the aircraft for pre and post-mission analysis.
The terms of the contract cover MRCY’s ADTS hardware, including data transfer devices, data transfer units, encryption modules and other key components. The BOA deal requires the company to perform the task at its Torrance, CA facility.
The latest agreement showcases the credibility of Mercury's advanced assemblies across the defense sector. It reflects the company’s deep commitment to transforming the U.S Department of Defense while ensuring commercial technology’s availability across the sector.
Mercury Systems Inc Price and Consensus
Mercury Systems Inc price-consensus-chart | Mercury Systems Inc Quote
Continuous Flow of Defense Contracts
Mercury has been steadily winning multiple development contracts from the defense department. Last week, it was awarded a $25-million contract by a leading defense prime contractor to support an electronic warfare application with its integrated high-performance radio frequency subsystems. The order is expected to be shipped over the next several quarters.
In April, the company secured three different defense contracts with a cumulative value worth approximately $38 million. In March, it secured a $165-million indefinite delivery/indefinite quantity contract from the U.S. Air Force to provide flight data recorders to support a secure mission data system of air services' F-16 fleet.
Mercury's total bookings at the end of the third quarter of fiscal 2022 were $295 million, reflecting a book-to-bill ratio of 1.17. The company ended the quarter with a backlog of $996 million, up $102.3 million from a year ago. From this backlog, products worth $637.6 million are expected to be shipped within the next 12 months.
Modernization in radar, EW and C4I is rapid, thus providing the company with new opportunities in weapon systems, space, avionics processing and mission computing and embedded rugged services.
Mercury's domain expertise in analog and digital integration has helped it build a solid business relationship with defense prime contractors.
However, pandemic-induced modernization delays and changes in administration and customer execution issues are likely to continue impacting the company's organic revenue growth in the near term.
Low-margin deals are likely to affect Mercury's profitability, despite the steady stream of development contracts from the federal government. Increased investments to expand the business might weigh on the bottom line.
Zacks Rank & Stocks to Consider
Mercury currently carries a Zacks Rank #3 (Hold). Shares of MRCY have declined 21.9% in the past year.
Some better-ranked stocks from the broader technology sector are ON Semiconductor (ON - Free Report) , Analog Devices (ADI - Free Report) and MaxLinear (MXL - Free Report) . ON and Analog Devices each sport a Zacks Rank #1 (Strong Buy), while MaxLinear has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ON's second-quarter 2022 earnings has been revised to $1.26 per share from $1.04 over the past 60 days. For 2022, earnings estimates have moved north by 18% to $4.91 per share in the past 60 days.
ON's earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 2.8%. Shares of ON have plunged 7.8% year to date (“YTD”).
The Zacks Consensus Estimate for Analog Devices' third-quarter fiscal 2022 earnings has been revised upward by 24 cents to $2.42 per share over the past 30 days. For fiscal 2022, earnings estimates have moved north by 9.6% to $9.24 per share in the past 30 days.
Analog Devices' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 7.7%. Shares of ADI have decreased 8.1% YTD.
The Zacks Consensus Estimate for MaxLinear's second-quarter 2022 earnings has been revised upward by 10 cents to $1.02 per share over the past 60 days. For 2022, the Zacks Consensus Estimate for MaxLinear's earnings has moved north by 36 cents to $4.07 per share in the past 60 days.
MaxLinear's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 9.6%. Shares of MXL have plunged 47.3% YTD.