The Richmond, B.C., company said Friday it would provide nine heavy, new technology aircraft to Norway’s Statoil ASA as part of the deal. The contracts are to begin in 2009 and 2010, and according to CHC represent the largest bundle of helicopter service contracts ever awarded.
Combined, they are expected to add incremental annual revenue of $80-million to CHC’s top line.
In response, Mr. Newman raised his target price to $32 a share from his previous estimate of $27, and maintained his “outperform” rating on the stock.
“While the near-term may be influenced by aircraft introduction costs, aircraft serviceability and FX, we believe momentum should accelerate in f2008, given the ramp up of several new contracts, improvements in aircraft serviceability, a less onerous maintenance schedule and reduced SOX costs,” Mr. Newman wrote in his note Monday.