Ahead Of The Bell: Force Protection Upgraded

HARTFORD, Conn. (AP) — Cost-cutting that includes layoffs of 120 workers by Force Protection Inc. is bigger and faster than an analyst expected as he upgraded the shares Thursday of the manufacturer of mine-resistant armored vehicles.

Analyst James McIlree of Collins Stewart upgraded the Ladson, S.C., company to "Buy" from "Hold" and established a $7 price target.

Force Protection said Wednesday it will cut $40 million in expenses, to be substantially completed in the first half of next year. The company said it will reduce its work force by 10 percent and expects a severance-related charge of about $2 million in the third quarter.

"This is a move we have long called for, but the magnitude and timing are bigger and faster than we modeled," McIlree said in a client note. "We have been commenting about the necessity of cost cuts for some time due to lower vehicle production and overhead absorption."

In late June, Force Dynamics, a joint venture between Force Protection and General Dynamics Corp., was among three companies to lose to Oshkosh Corp. for a $1.06 billion deal to build 2,244 blast resistant, off-road vehicles for forces in Afghanistan.