Markets
TXT

Boeing Secures $2.1B Air Force Contract for KC-46 Aircraft

The Boeing Co.BA has won a modification contract from the U.S. Air Force for the production of KC-46 Lot 3.

Contract Details

The contract is valued at $2.1 billion. It was awarded by the Air Force Life Cycle Management Center, Wright-Patterson Air Force Base, OH.

Per the contract, Boeing will provide 15 KC-46 aircraft, data, two spare engines and five wing refueling pod kits.

Prior to this contract, the Air Force had awarded a contract for 19 KC-46 aircraft valued at $2.8 billion. The first aircraft was scheduled to be delivered by March but has been delayed up to the end of 2017.

Work is scheduled to be completed by Jul 30, 2019 and will be executed in Seattle, WA. The contract will use fiscal 2017 aircraft procurement funds.

A Brief Note on KC-46

Manufactured on the air frame of Boeing's 767 commercial jet, KC-46 is the first new U.S. tanker since the 1980s. In the words of Leanne Caret, Boeing's Defense, Space & Security president and CEO, "The KC-46 tanker will provide the Air Force unprecedented refueling capabilities, operational flexibility and combat readiness".

The wide-bodied KC-46 Pegasus is a multirole tanker that can refuel all U.S., allied and coalition military aircraft compatible with international aerial refueling procedures, according to the company.

About Boeing

Boeing witnesses a steady flow of contracts from the Pentagon as well as international customers. It is one of the major players in the defense business. Its defense business stands out among its peers by virtue of its broadly diversified programs, strong order bookings and solid backlog.

Recently, Boeing reported its fourth-quarter 2016 results wherein earnings came in at $2.47 per share, up 54.4% from the year-ago figure of $1.60. The company's revenues amounted to $23.29 billion in the reported quarter, declining 1.2% year over year. Backlog at the end of the fourth quarter was $473.0 billion.

Price Movement

Shares of Boeing have gained 38% over the last 12 months, outperforming the Zacks categorized Aerospace-Defense industry's gain of 26.1%. This could be because the company's strong balance sheet and cash flows provide financial flexibility in matters of incremental dividend, ongoing share repurchases and earnings accretive acquisitions. The company has also put up strong competition against peers like General Dynamics Corp. GD , Textron, Inc. TXT and Huntington Ingalls Industries, Inc. HII .

Zacks Rank

Boeing currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Zacks' Top Investment Ideas for Long-Term Profit

How would you like to see our best recommendations to help you find today's most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>

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

Textron Inc. (TXT): 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.


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

In This Story

TXT BA GD HII

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More