Parker Hannifin with US Navy - Analyst Blog
19 Dicembre 2011 - 9:15AM
Zacks
Parker Hannifin
Corporation’s (PH) aerospace segment, Parker Aerospace,
has entered into a public-private partnership (PPP) agreement with
the U.S. Navy’s Fleet Readiness Center-Southwest (FRC-SW) in San
Diego.
Through this public-private
partnership, the Parker Aerospace Customer Support Operations will
be able to expand its offering of logistic services by facilitating
the Navy to directly enter into workloads contract with Parker.
Earlier, the contract was directed to the depot without any
participation of Parker.
Initial signing of the agreement
was done on September 27 and a formal signing ceremony will be held
on October 6. With the formal signing, the Parker/FRCSW partnership
was established, covering all Parker bills of material on F/A-18A
through G aircraft platforms.
As per the agreement, Parker will
be supporting the experienced team at FRCSW while supplying all of
its parts necessary to perform the repairs with the mutual
objective of ensuring service readiness of the worldwide fleet.
The Navy had wanted to enter
directly into a contract with Parker on all the F/A-18, E-2, and
V-22 Parker parts, with annual revenue generation capacity of $10
million. A resource to manage the business on-site at FRCSW will be
hired by Parker. For Parker’s inventory and kitting of bills of
material, an on-site office and area has been provided.
We believe Parker Hannifin is a
high-quality company that is showing good execution. The company is
witnessing a recovery in aerospace demand, which positively favors
its future growth. MRO (Maintenance, Repair, and Overhaul) is
expected to get a boost from continued deferral of capital
investment in new machines. Parker Hannifin’s strong exposure to
MRO-type products and ability to convert net income into free cash
flow will benefit future earnings.
However, the company’s domestic and
foreign operations are subject to significant competitive
pressures. To compete successfully, the company’s Industrial
Segment and Climate & Industrial Controls Segment must excel in
terms of product quality and innovation, customer service,
manufacturing and distribution capability and price
competitiveness. Meanwhile, the Aerospace Segment must excel on the
basis of technological and engineering capability, quality,
delivery and service, and price competitiveness. Major competitors
of Parker are Eaton Corporation (ETN) and
Honeywell International Inc. (HON)
Parker-Hannifin Corporation is a
leading worldwide full-line diversified manufacturer of motion and
control technologies and systems, including fluid power systems,
electromechanical controls and related components. In addition to
motion and control products, the company is also a leading
worldwide producer of fluid purification, fluid and fuel control,
process instrumentation, air conditioning, refrigeration,
electromagnetic shielding and thermal management products and
systems.
Currently, we are maintaining a
Zacks #2 Rank (short-term Buy recommendation) on
Parker-Hannifin.
EATON CORP (ETN): Free Stock Analysis Report
HONEYWELL INTL (HON): Free Stock Analysis Report
PARKER HANNIFIN (PH): Free Stock Analysis Report
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