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Ceradyne Wins Army Contract; Its Stock Surges

August 21, 2004|From Reuters

Shares of Ceradyne Inc., a maker of ceramic body armor, surged to an all-time high Friday on news that the company had won an Army contract worth up to $461 million.

Shares of the Costa Mesa manufacturer rose $5.08 , or 15%, to $39.30 on Nasdaq.

"They are going to see a large numbers of shares traded today," Mike Crawford, an analyst at B. Riley & Co., said Friday. "I have never seen a contract of this size in this industry."

"There is a very good chance the company will raise its earnings and revenue forecast very soon," Crawford added.

The three-year contract, awarded by the Army missions division, calls for Ceradyne to provide lightweight ceramic body armor. The company received an initial delivery order worth more than $28 million and expects shipments of more than $168 million in 2005, Chief Executive Joel Moskowitz said.

"Ceradyne is proud to have been awarded this contract and is confident that the Ceradyne armor systems that will be fielded in large quantities will save American lives," he said.

Ceradyne shares have risen strongly this year and recently touched new highs after the company said it would diversify into industrial markets by buying Germany's ESK Ceramics for $136 million.

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