"This is where our customers want to go," said Robert Durbin, Exelis' senior vice president for strategy, in an interview. Technology almost "puts commanders on the ground, seeing what [soldiers are] seeing. It helps leaders make better decisions."
In a post-Iraq and Afghanistan world, the stakes couldn't be higher. Research firm IDC Government Insights expects that the Pentagon will spend more than $34 billion next year just on information technology solutions alone. That amount, however, is lower than the 2010 peak of $37.7 billion—underscoring how the U.S. is becoming choosier about where it doles out its cash.
Against the backdrop of Washington's polarizing budget battles, the world's largest military expects to cut $500 billion through the year 2021, Defense Secretary Chuck Hagel said in a recent speech. One of the areas he identified as a cost saver was weapons modernization—one of Exelis specialties.
Exelis provides a range of services for several government agencies, including NASA and the Federal Aviation Administration. Defense is a linchpin of the company's solutions, which include providing information management, communications and logistics support to all four branches of the U.S. military. Exelis posted revenues of $5.5 billion in 2012 and its stock, trading at about $16, is near a 52-week high.
The company is particularly upbeat about prospects for its night vision goggles, which Exelis bills as a way to enhance tactical intelligence. The goggles use software that integrates video, voice and data that allows commanders to see what soldiers in the field see and send instructions similar to a text or instant message. According to Durbin, the U.S. military isn't the only potential market for the devices.