Pall Corporation (PLL) has been awarded a contract by the United States Army to supply Centrisep engine advanced protection system for 59 Boeing CH-47 Chinook helicopters deployed by the U.S. military.
The contract is valued at $14 million with deliveries beginning Dec. 2011 until Nov 2012.
The system is designed to save engines from particle erosion by continuously separating dust and sand from inlet air. This is extremely helpful in harsh desert environments, where sand, dust and other damaging particles can quickly erode engines.
Pall enjoys above-average financial returns and reasonable growth prospects because of a highly-engineered technology, reliable global distribution, strong niche markets, long and close working histories with customers, few competitors and solid product quality supplemented by technical service.
PLL is considered to be the largest player in the filtration/separations industry based on its revenue and approximately 7% market share.
In the long run, Pall will likely benefit from several secular trends, such as global infrastructure growth, increasing demand for water filtration systems and continued steady growth in the medical and pharmaceutical markets.
Changes in product mix and product pricing may impact the company’s operating results, particularly with the expansion of the systems business, in which the company experiences significantly longer sales cycles with less predictable revenue and no certainty of future revenue streams from related consumable product offerings and services.
The company may not be able to achieve the savings anticipated from its cost reduction and margin improvement initiatives, including the timing of completion of its facilities’ rationalization initiative.
Pall Corporation, a New York firm incorporated in July 1946, along with its subsidiaries is a leading supplier of filtration, separation and purification technologies, by using its engineering capability and fluid management expertise. 3M Purification Inc, belonging to 3M Company (MMM) group, is a direct competitor.
We currently have a Neutral recommendation on Pall Corporation.
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