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

By Travis HoiumMarketsFool.com

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

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.

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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.

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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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