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FLIR Systems (FLIR) Wins $94.3M Deal, to Assist DHS' Program

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FLIR Systems, Inc. secured Indefinite Delivery, Indefinite Quantity (IDIQ) contract, worth $94.3 million at ceiling value, from the Federal Aviation Administration Logistics Center (“FAALC”). The company will support the U.S. Department of Homeland Security’s (“DHS”) Mobile Surveillance Capability (“MSC”) program.

Under the contract, the first order entails the supply of Line Replaceable Units (LRUs) mounted on MSC vehicles. The value of the first contract is $12.2 million. Notably, FAALC serves as an independent government entity providing engineering, technical and logistics services to support U.S. Customs and Border Protection (CBP) through an Interagency Agreement with DHS.

To support the MSC vehicles, FLIR Systems’ mobile surveillance solutions combine gyro-stabilized, multi-sensor thermal imaging systems with ground surveillance radar, lasers as well as tactical command and control software. These integrated solutions are programmed to perform in the most demanding of environments. Solid execution and streamlined business have enabled the company to witness improvements in backlog, adjusted gross margin, operating margin, net income and earnings per share.

Customer Awareness Strategies

FLIR Systems’ strives to provide reliable and effective imaging as well as threat-detection technologies to users. To increase awareness and surveillance through threat detection among users, the company launched Black Hornet 3 nano-unmanned aerial vehicle (UAV) in Jun 2018 which is now powered with the ability to navigate in GPS-denied environments.

The Company is extremely committed toward the introduction of innovative products to expand customer base and strengthen foothold in new markets. These factors are likely to boost the company’s performance.

Long-Term Plans

FLIR Systems is focused on restructuring its business by closing non-profitable facilities. The company believes that by streamlining businesses, it can further strengthen internal communication, collaboration and cooperation. Also, this will create a logical structure to leverage on the company’s vertical integration and focus on core markets.  Restructuring activities undertaken since 2013 have helped the company reap synergies and drive profitable growth. Such initiatives have helped the company combat headwinds like currency fluctuations and tough market conditions.

The company makes acquisitions to boost core and non-core businesses. In 2016, the company acquired Prox Dynamics, a leading manufacturer of nano-drone for covert surveillance applications, for $134 million. The buyout later helped FLIR Systems in leveraging Lepton’s capabilities, which is a high-resolution micro thermal camera module.

Price Performance   

FLIR Systems’ shares have surged 56.0% in the past year compared with Zacks S&P 500 composite’s rise of 16.3%.

Zacks Rank & Other Stocks to Consider

FLIR Systems currently carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the same sector are Aerojet Rocketdyne Holdings , Huntington Ingalls Industries, Inc (HII - Free Report) and Engility Holdings . While Aerojet Rocketdyne sports a Zacks Rank #1 (Strong Buy), Huntington Ingalls and Engility carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Aerojet Rocketdyne Holdings pulled off an average positive earnings surprise of 9.27% in the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings moved up 24.5% to $1.27 in the past 60 days.

Huntington Ingalls came up with an average positive earnings surprise of 9.48% in the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings improved 6.3% to $17.24 in the past 60 days.

Engility Holdings delivered an average positive earnings surprise of 19% in the preceding four quarters. The Zacks Consensus Estimate for 2018 earnings moved up 16.1% to $2.02 in the past 60 days.

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