Arlington, Va.-based defense contractor ATK (UNKNOWN:ATK.DL) landed a big defense contract Monday. It announced that the Pentagon has begun placing orders under a new ammunition supply contract that it entered into with ATK on Oct. 1, 2013.
The orders, worth $387 million to ATK, call for the defense contractor to supply the U.S. Army Contracting Command, Rock Island, with 5.56 mm, 7.62 mm, and .50-caliber ammunition. This ammunition will be produced at the Lake City Army Ammunition Plant in Independence, Mo., over the next seven years. The supply contract is expected to terminate in 2019, but may be extended by up to three more years.
Approximately 48% of ATK's annual revenues come from ammunition supply contracts such as this one, as well as other defense contracts to produce other munitions and armaments for the U.S. military.
Fool contributor Rich Smith has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.