Aerospace and defense operator
The Boeing Company
) received a couple of contracts worth $661 million from the
Department of Defense (DoD). Together these contracts comprised
nearly 68% of the total orders awarded by the DoD on Dec 26.
BOEING CO (BA): Free Stock Analysis Report
GENL DYNAMICS (GD): Free Stock Analysis
LOCKHEED MARTIN (LMT): Free Stock Analysis
NORTHROP GRUMMN (NOC): Free Stock Analysis
To read this article on Zacks.com click here.
The largest among the two contracts was a $617.7 million order
for remanufacturing 22 CH-47F Chinook helicopters, and build 6
more, for the U.S. Army. This contract also includes a long lead
fund to acquire parts needed to remanufacture 13 more Chinooks.
These helicopters are expected to be delivered by Dec 31, 2020.
Chinook helicopters were first introduced by the Army during the
Vietnam War and subsequently more efficient and advanced versions
were launched. The latest version of Chinooks has features like
reduced vibration effects, an integrated cockpit control system
and more powerful engines with digital fuel controls.
Boeing's Chinook has been an old war horse and has served the
Army well over the years. Featuring the latest technologies, the
Chinook gives the Army an edge in combat situations.
As per the second contact, worth $43.2 million, the company will
impart engineering and technical field services training for U.S.
Navy and Marine Corps military and civilian personnel, and also
Kuwaiti military personnel. This contract will last until the end
All the large U.S. defense operators are keen on winning foreign
contracts to make up for domestic defense budget cuts. Japan
could be the next big destination for these defense primes. Japan
recently announced a defense budget of $45.8 billion for the next
fiscal, up 2.2% year over year.
Defense spending in Japan could rise further driven by spiraling
tensions between Tokyo and Beijing. The big U.S. players
including Boeing could definitely look at Japan to earn more
Boeing currently has a Zacks Rank #2 (Buy). Other players in the
aerospace/defense sector, which look attractive at current
Lockheed Martin Corporation
Northrop Grumman Corporation
). All these stocks carry the same rank as Boeing.