GR Goodrich Corp. (The)

Goodrich Corporation (GR) has signed a couple of important agreements with Emirates. First and foremost, the two companies signed a General Terms Agreement (“GTA”) that provides a broad guideline for all future aftermarket agreements in the areas of maintenance, repair and overhaul (“MRO”). The second agreement is an application of the first. Under a ten-year Specific Business Agreement, Goodrich would cover overhaul and support services of 16 passenger evacuation slides on the Emirates Airbus A380 fleet.

All maintenance work will be conducted at Goodrich's Middle East MRO campus in Dubai, United Arab Emirates. Goodrich's Middle East campus offers MRO services for components and systems for both commercial and military aircraft. The services provided by the campus include nacelle systems, cargo systems, de-icing systems, hoists and winches, sensor systems, engine controls, power systems and evacuation systems.

Management believes that the GTA will help in making discussions simpler and faster for future tender opportunities, and also increase business efficiency. Moreover, these agreements will improve the business relationship and will add to the substantial body of MRO work that Goodrich already does for Emirates.

Goodrich is a global supplier of components and systems for communications and avionics. Going forward, key growth drivers for the company include 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. We are also looking forward to the company’s ongoing merger proceedings with United Technologies Corporation (UTX).

There is, however, 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. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

Recently, Goodrich Corporation announced third quarter 2011 results. In the reported quarter, the company clocked adjusted earnings of $1.70 per share, striding ahead of the Zacks Consensus Estimate of $1.50 and showing an improvement from $1.25 per share earned a year ago.

Goodrich Corporation is a global supplier of systems and services to aerospace, defense and homeland security markets.  The company is a leading manufacturer of inflatable evacuation slides and slide/rafts for commercial aircraft. With one of the most strategically diversified portfolios of products in the industry, Goodrich serves a global customer base with significant worldwide manufacturing and service facilities.

 
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