URS Gets Navy Order - Analyst Blog

URS Corporation (URS) has won orders from the Department of Defense for providing maintenance related services to the U.S. Navy aircraft stationed in California, Washington and Virginia. There are five such two-year orders having a maximum value of $120.5 million for the company.

URS will facilitate flight support programs, organizational level maintenance activities, corrosion control and tool room management activities and provide back-up for 300 aircraft.

URS continues to see favorable trends in the federal government sector. There is strong funding for O&M programs, which means increased opportunities to support long-term DoD initiatives and stable funding for the DoE's environmental and nuclear programs, including the National Nuclear Security Administration.

With respect to infrastructure, URS's long-term outlook is very positive. State and local governments continue to find resources to fund infrastructure programs. In the previous fiscal year, states and municipalities sold billions of dollars of new bonds to fund infrastructure projects, including education and healthcare facilities as well as new roads. Key projects continue to move forward.

Demand for its services is cyclical and vulnerable to economic downturns and reductions in government and private industry spending. If the economy remains weak or client spending declines further, then its revenues, profits and financial condition may deteriorate.

Global economic conditions have caused, and may continue to cause, clients to delay, curtail or cancel proposed and existing projects. This decreases the overall demand for services, leading to weak financial results.

URS provides engineering, construction and technical services. As such, it offers a broad range of program management, planning, design, engineering, construction and construction management, operations and maintenance, and decommissioning and closure services to public agencies and private sector clients globally.

It also is a major U.S. federal government contractor in the areas of systems engineering and technical assistance, and operations and maintenance. It has approximately 56,000 employees in a worldwide network of offices and contract-specific job sites in more than 30 countries. Fluor Corporation (FLR) is a major competitor.

We currently have a Neutral recommendation on URS Corporation.

 
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