Ceradyne (CRDN) opened sharply higher this morning when they announced some good news. Ceradyne Gets $133 Million Army Contract – 12/22/2006 4:31:00 AM – Manufacturing.Net – CA6402229
Ceradyne said Firday it received a $133 million delivery order for Enhanced Side Ballistic Inserts (ESBI) from the U.S. Army, Aberdeen Proving Ground, Maryland.
The thing is, the order was part of an already announced contract. For sales to the military companies generally get an umbrella contract for a large quantity over multiple years. However, each year’s portion is subject to Congressional approval. So while it would have been bad news if the company did not receive the follow-on, receiving it was more or less expected.
As trading continues, it appears the market is coming to this conclusion, as half the initial gains have been reversed.Like this article? Why not try out: