GR Goodrich Corp. (The)

Goodrich Corporation (GR) has been selected by Russian Helicopters, JSC to provide the main rotor actuator and hydraulic power supply for its upgraded Mi-34C1 light helicopter. Russian Helicopters, JSC is the subsidiary of UIC Oboronprom, a part of Russian Technologies State Corporation.

The agreement includes research and development, original equipment supply and aftermarket support. Prototypes for flight tests have already been produced by Goodrich's Actuation Systems business with entry into service planned for late 2012.

The Mil Mi-34C1 light helicopter is an upgraded version of the Mi-34 helicopter which became operational in 1993. The upgraded version plans to achieve an increase in maximum takeoff weight to 1.5 tons and allows for the piston engine to be potentially replaced by a gas-turbine engine at the time of modernization in future.

Goodrich is a global supplier of components and systems for communications and avionics. Most of the company’s products are sold to governments and commercial customers that will lead to higher volume sales and will create economies of scale thus helping to win cost-sensitive government contracts. The company also provides niche equipment, which has a captive market.

Goodrich presently retains a short-term Zacks #2 Rank (Buy), which compares favorably with its peer United Technologies Corporation (UTX) carrying a Zacks #3 Rank (Hold). The bullish outlook for Goodrich is supported by its geographically-diverse customer mix, its diverse presence in both commercial and business jets, the resurgence in commercial aftermarket sales, a strong balance sheet, an incremental dividend and an ongoing share repurchase program.

This is, however, offset by uncertainty in the recovery of the large commercial airplane original equipment market, along with possible defense cutbacks, dependence on international sales, high research and development overheads and regulatory risks. We maintain our long-term Neutral recommendation on the stock.

Based in Charlotte, North Carolina, Goodrich Corporation supplies components, systems and services to the commercial, regional, business and general aviation markets in the U.S. and in other parts of the world. Goodrich also supplies aircraft and satellite systems to the global military and space markets. Goodrich’s products and services are principally sold to customers in North America, Europe and Asia.

 
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