Why Shares of Kratos Defense & Security Solutions, Inc. Popped 16.5% Today

By Markets Fool.com

Drones are becoming an increasingly important part of the military's arsenal. Image source: Getty Images.

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What: Shares of Kratos Defense & Security Solutions, Inc jumped as much as 16.5% today after announcing a big contract win. At 1:10 p.m. EDT, shares had settled at a 13% gain for the day.

So what: Kratos announced that it has won an unmanned aerial system demonstration contract that is worth $40.8 million in cost-sharing with the Air Force Research Laboratory. Eventually, the government's investment in this technology is expected to be worth as much as $100 million.

Under the contract, Kratos will maintain ownership of assets in intellectual property, which could help develop more unmanned aircraft in the future.

Now what: Kratos has been working to advance its unmanned defense business, and this contract will be a big step toward that goal. Management also said the deal will add to revenue, profitability, and cash flow. After a loss reportedover the past year, and with more losses expected in coming quarters, a turnaround on the bottom line would be welcome news for Kratos Defense.

The article Why Shares of Kratos Defense & Security Solutions, Inc. Popped 16.5% Today originally appeared on Fool.com.

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Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.