Once again, the Bell-Boeing Joint Project Office, which is a
joint venture between
The Boeing Company
), has clinched a contract from the U.S. Department of Defense
(DoD) on Aug 16. This joint venture that is focused on
manufacturing V-22 Osprey tiltrotor aircraft received a
firm-fixed-price, sole-source contract worth $43 million for the
supply of prop rotor gearboxes to the Defense Logistics Agency
("DLA"). On that day the DoD announced a number of contracts
exceeding $1.2 billion.
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In June this year, the Joint Project Office had received a
five-year modification contract worth $4.9 billion for the
manufacture of 99 V-22 Osprey tiltrotor aircraft. Per the
contract, Bell-Boeing had to produce 92 MV-22 Osprey aircraft for
the U.S. Marine Corps, and 7 carrier-variant CV-22s for the U.S.
Navy. The contract is scheduled to be completed by Sep 2019.
Among the other award winners last Friday was
), which received an option-exercise contract worth $29.9 million
to work on a digital imaging network-picture archive
communication system for the DLA. However, the major chunk of the
contract went to privately held firm Hoist Liftruck Manufacturing
of Bedford Park, Ill. This firm received a contract worth $925
million to supply commercial-type material handling equipment to
The Boeing-Textron joint venture negates any specific business
risk. Recently, both the companies posted second quarter results
which beat the Zacks Consensus Estimate.
Going forward, Textron's strong presence in diverse areas of
general aviation aircraft, helicopter, aircraft engines, golf
carts, turf maintenance equipment, electronic test equipment and
blow-molded fuel tanks would fetch lucrative returns for the
company. Meanwhile, strong demand for Boeing's defense products
would keep it well positioned.
However, the adverse effects of sequestration and defense budget
uncertainty cannot be ignored. Both the companies presently
retain a short-term Zacks Rank #3 (Hold). In the near term, we
would advise investors to accumulate its short-term Zacks Rank #2
Lockheed Martin Corp.