The Department of Defense awarded eight contracts Wednesday, worth just under $956 million in combined value. Veteran defense contractor Northrop Grumman claimed the largest award -- $617 million for a flight of airborne early warning aircraft. But Parker-Hannifin (NYSE:PH) didn't fare too poorly, either.
Winning an award worth $181.7 million (19% of the funds on offer Wednesday), Parker secured a firm-fixed-price, sole-source contract modification to produce wheel equipment, parts, and assemblies for the U.S. Army, Navy, Air Force, Marine Corps, and Defense Logistics Agency through Sept. 30, 2014.
The award amounts to approximately 1.4% of the revenues Parker-Hannifin booked in 2012. More importantly, the products covered by the contract appear to come from the firm's "Industrial, North America" business unit. Boasting an operating profit margin of 17.8%, this is Parker-Hannifin's most profitable business unit, meaning that while few, these are very high-quality revenues that the company will book.