Goodrich Corporation (GR) has inked a deal with Turkish Technic Incorporation to form a joint venture company, named Goodrich Turkish Technic Service Center, to provide maintenance, repair and overhaul (MRO) services in Istanbul, Turkey. In November 2007, both the companies had announced their intention to form a joint venture.
 
The joint venture company will provide nacelle, thrust reverser and related component services including rotable support for the Airbus and Boeing fleets of Turkish Airlines and other carriers in Turkey and neighboring regional fleets. Also, through this joint venture, Goodrich will expand its MRO global footprint.
 
The center initially plans to employ 20 people with plans to expand to more than 70 employees within the next 10 years. Site selection for the Goodrich Turkish Technic Service Center near the Sabiha Gokcen International Airport in Istanbul is currently underway. The center is being planned on an area of 20,000 square feet with the option to double the size. The center is expected to be operational in the first quarter of 2011.
 
Turkish Technic intends to be the leading nacelle, thrust reverser and related component service provider in its region by combining its existing MRO capabilities with that of Goodrich. Also, Turkish Technic wants to establish Istanbul as an important maintenance and repair hub in Turkey as well as the surrounding international market.
 
During the first quarter earnings call, Goodrich maintained its fiscal year 2010 total sales expectation of $7.1 billion, which reflects a 6% growth from 2009 levels. Earnings per share are expected to range between $4.15 and $4.40. The Zacks Consensus Estimate for full year 2010 is earnings of $4.36 per share and $5.14 for full year 2011.
 
Charlotte, North Carolina based Goodrich is a global supplier of systems and services to the aerospace, defense and homeland security markets.
 
Given the production rate increases of Boeing and Airbus for a variety of their programs and expected 787 deliveries, Goodrich expects to post strong large commercial original equipment sales growth in the foreseeable future. The company also continues to generate robust cash flow and pay back a substantial portion of its free cash flow through share repurchases and incremental dividend.
 
However, a tepid commercial aerospace market and high research and development overheads of the company prompt us to be “Neutral” on Goodrich. The quantitative Zacks #3 Rank for the company indicates no clear directional pressure on the shares over the near term.
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