Quantcast

Boeing (BA) Secures $42M Navy Deal for F/A-18E/F Aircraft


Shutterstock photo

Aerospace giant, The Boeing Co. BA , has secured a modification contract to provide additional funding for the Service Life Assessment Program (SLAP) and Service Life Extension Program (SLEP), Phase C for the F/A-18E/F aircraft.

Notably, the SLAP and SLEP programs aid the extension of the service life of the F/A-18E/F jets beyond the original design of the 6,000 flight hours.

Details of the Deal

Valued at $42 million, the contract has been awarded by the Naval Air Systems Command, Patuxent River, MD.

Work related to this deal is scheduled to be over by Jul 30, 2021 and will be carried out in St. Louis, MS and El Segundo, CA.

A Brief Note on F/A-18

Boeing's F/A-18 Super Hornet - a twin-engine, supersonic, all weather multirole fighter jet - is the U.S. Navy's primary strike and air superiority aircraft. It is capable of landing and taking off from an aircraft carrier. F/A 18E is a single-seat variant of the Super Hornet, which is about 25% larger than its predecessor, the F/A-18C/D, but comparatively contains 42% lesser structural parts.

Why Boeing?

Boeing is one of the major players in the defense business. In particular, among other defense equipments, the company's key forte has been combat-proven aircraft. Additionally, with its proven expertise in aerospace programs, it has been clinching a huge number of contracts from the Pentagon for long.

Evidently, Boeing won the Aerospace Systems Air Platform Technology Research program contract  from the U.S. Air Force last week. The deal came up with a ceiling value of $499 million. Per the contract, the company will be responsible for providing quality research for affordable, revolutionary capabilities for the warfighter. Again, last month, the company clinched a contract worth $323.5 million, to supply spare parts of F/A-18 A-F and F/A-18 aircraft from the Defense Logistics Agency Aviation. In this regard, we expect the recently won contract to add further impetus to the company's growth trajectory.

Moreover, the current budget scenario is favorable to the defense industry, which also buoys investors' optimism. To this end, the U.S. House of Representatives passed the 2018 defense policy bill this July, reflecting an expenditure level of $696 billion. The figure exceeded President Trump's fiscal 2018 defense budget request proposed in March.

If enacted, this budgetary amendment is expected to immensely boost Boeing and other defense major's business in the near term.

Price Movement

Shares of Boeing have surged 86.8% in the last 12 months, outperforming the industry 's gain of 41.6%. This might have been driven by the company's strong balance sheet and cash flows that provide financial flexibility in matters of incremental dividend, ongoing share repurchases and earnings accretive acquisitions. In addition, the company poses strong competition to its peers like Lockheed Martin Corp. LMT , General Dynamics Corporation GD and Huntington Ingalls Industries, Inc. HII .



Zacks Rank

Boeing currently holds a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Boeing Company (The) (BA): Free Stock Analysis Report

General Dynamics Corporation (GD): Free Stock Analysis Report

Lockheed Martin Corporation (LMT): Free Stock Analysis Report

Huntington Ingalls Industries, Inc. (HII): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Stocks
Referenced Symbols: BA , GD , LMT , HII


More from Zacks.com

Subscribe






Zacks.com
Contributor:

Zacks.com

Equity Research








Research Brokers before you trade

Want to trade FX?





Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com