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Boeing Wins $262M U.S. Air Force Contract for JDAM Tail kits

A Boeing Co.BA unit, Defense Space and Security ("BDS"), has won a modification contract, worth $262 million, for lot 19 Joint Direct Attack Munition ("JDAM") tail kits. Contracting activity is Air Force Life Cycle Management Center, Hill Air Force Base, UT.

Per the modified contract, Boeing will provide JDAM strap-on inertial guidance kits that have the potential to enhance weapon accuracy for conventional inventory bombs using guidance updates from Global Positioning Systems ("GPS").

Work is scheduled to be completed by Nov 20, 2017 and will be performed in St. Louis, MO.

JDAM is a guidance kit that converts conventional aircraft-delivered bombs without a guidance system into all-weather precision-guided munitions. JDAM-equipped bombs are directed by an integrated inertial guidance system attached to a GPS receiver, which gives it a range of up to 15 nautical miles. Boeing has built approximately 0.3 million JDAM guidance kits since its production commenced in 1998. These guidance kits have been combat-proven by the Air Force, Navy, Marines and international U.S. allies.

Boeing is one of the major players in the defense business. Boeing's defense business stands out among its peers by virtue of its broadly diversified programs, strong order bookings and order backlog. The company has been engaged in reshaping its defense portfolio from time to time. In Feb 2015, it created a new organization - BDS Development - as part of the restructuring of its defense and space business. The move is expected to enhance product efficiency and lower costs for Boeing's defense customers in addition to maintaining delivery schedules.

We remind investors that the company recently reported third-quarter earnings results wherein earnings beat the Zacks Consensus Estimate by 13.5% and increased 18% year over year. Revenues also improved 9% year over year. However, the BDS segment witnessed an approximate 6% year-over-year decline in its quarterly revenues.

Zacks Rank

Boeing currently has a Zacks Rank #2 (Buy). Other favorably placed stocks in the aerospace and defense sector are Leidos Holdings, Inc. LDOS , General Dynamics Corporation GD and TransDigm Group Incorporated TDG . While Leidos and TransDigm sport a Zacks Rank #1 (Strong Buy), General Dynamics carries the same rank as Boeing.

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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.

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