Ahead Of The Bell: Defense Contractors

HARTFORD, Conn. (AP) — A large increase in Pentagon orders for off-road military vehicles would not only be a boon for several defense contractors, but could lead to new and more-lucrative orders, an analyst said Friday.

Analyst James McIlree of Collins Stewart said an advisory council to the Joint Chiefs of Staff has approved an increase in military all-terrain vehicles from 2,080 to 5,244.

The potential could become much larger if the all-terrain vehicle eventually is transformed into the newer joint light tactical vehicle program, he said. It would yield revenue for the company that wins the contract to more than $2 billion to $2.5 billion for 3,700 vehicles designed to protect troops from bomb blasts, he said.

Suppliers of equipment for the all-terrain vehicles is a "lower risk way to play what could be a winner-take-all game," he said.

Companies that have won previous contracts "are positioned to again be winners this cycle," McIlree said. Contract winners before that McIlree said could receive contracts again are Ultralife Corp., Harris Corp., Comtech Telecommunications Corp., Axsys Technologies Inc. and FLIR Systems Inc.

McIlree said he believes the field of companies that could win the vehicle contract has been narrowed to Force Protection Inc., Oshkosh Corp., BAE Systems and Navistar International Corp.

>To order reprints of this article, click here: Reprints