Force Protection Inc., the Ladson-based manufacturer of armored military vehicles, has scooped another multimillion-dollar order from the Pentagon.
But with the government's announcement Wednesday that the bulk of its latest, $2.6 billion contract is going to two key rivals, investor unease over Force Protection's loss of market share brought a sharp drop in the value of its stock.
The Defense Department order for 358 Cougar Mine Resistant Ambush Protected vehicles, or MRAPs, is worth $379 million to Force Protection but represents just 14 percent of the government's total order.
In the U.S. military's final MRAP order of the year, rival International Military and Government, a division of Warrenville, Ill.-based Navistar International, was handed a $1.2 billion contract, or
40 percent of the total award, for 1,500 vehicles.
The U.S. subsidiary of British defense contractor BAE Systems received a $1.1 billion order for 1,268 vehicles. BAE manufactures its RG33 vehicle, in part, at a plant in Aiken.
The order marks a stark decline for the once high-flying Force Protection, which as recently as May saw its stock price top $30. Since then, the company has lost ground to its competitors and seen the value of its shares tumble 84 percent.
Force Protection spokesman Tommy Pruitt acknowledged Wednesday that the order was "disappointing" for Force Protection, but he said the company remains upbeat as it closes in on a large order from overseas.
He also said that contrary to some reports, Force Protection's Cheetah vehicle will be evaluated by the Defense Department as part of its MRAP II program.
Also, Pruitt said, the U.S. government has approved the sale of 300 Cougar and Buffalo vehicles to the British and Italian armed forces. The contracts have a combined value of about $150 million. The company has not received an official order for the vehicles, Pruitt said.
The smaller MRAP order will free space in the factory for these and additional overseas orders, he said.
"There's significant interest internationally," Pruitt said of the company's vehicles.
In response to Wednesday's announcement, two brokerage analysts downgraded Force Protection. Collins Stewart lowered its outlook on the shares from "buy" to "underperform," while Dougherty & Co. dropped the stock from "buy" to "neutral." Earlier in the week, analysts at Friedman Billings Ramsey made similar adjustments.
Wall Street's reaction to the announcement was swift. After opening Wednesday at $4.23, Force Protection's share price slumped to $3.89, the first time the stock has traded below $4 a share since June 5, 2006. It later recovered to a high of $5.12 before closing at $4.93, a 16.6 percent drop from Tuesday.
Force Protection's Buffalo and Cougar armored vehicles have been deployed in hot spots around the world, including Iraq and Afghanistan, since July 2003.