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How Ceradyne's 'Bull' Trampled Expectations

All told, in its bid to the government, Ceradyne has offered to supply some 41,000 Bulls valued at more than $50 billion. After giving its partners their share, Ceradyne would take home roughly half of that amount.

For comparison's sake, at current revenue-generation rates, Ceradyne would need more than three decades to bring in that kind of money.

To be sure, the U.S. military has no plans to spend that much on MRAPs right now. After all, experts estimate, the military ordered only 12,000 of the vehicles -- worth about $7.2 billion -- when violence in Iraq was at its peak last year. The military has since backed away from its aggressive push for more of the vehicles, signaling a likely end to at least the original MRAP program.

Still, MRAP II promises another major opportunity. This year, experts predict, the military could order about 3,000 of the next-generation vehicles under an MRAP II program that boasts some $12.5 billion in earmarked funding.

Without any Bull orders, Ceradyne expects to deliver minor growth this year, with sales of $780 million and earnings of $5.60 a share. With just a 550-Bull order, however, those numbers should jump by 37% and 19%, respectively, as the company hits the high end of its range.

"In the 40 years since I was involved in the founding of Ceradyne in August of 1967," CEO Joel Moskowitz told investors last October, "the company has never had a program as exciting -- and with the financial potential as large as -- our involvement with what we've now called the Bull."

'Team Bull'

Ceradyne can thank Ideal Innovations, better known as I3, for its opportunity.

During multiple visits to Iraq, I3 President Robert Kocher observed a threat posed by EFPs -- the most devastating of roadside bombs -- that could overcome the protection offered by even sturdy MRAP vehicles. When the Marines called for a solution in 2005, Kocher relied on his deep military and technological experience to seek an answer. He found one and soon patented it, then set off in search of a partner.
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