The Boeing Company (BA - Analyst Report) has received a total of three foreign military sales (“FMS”) contracts from the Department of Defense. The contracts, in aggregate, have a value of $132.6 million.
The lion’s share of these three FMS contracts, with a total value of $109.5 million, entails services in support of the Royal Saudi Land Force Aviation Command. This is a modification contract to a previously awarded firm-fixed-price FMS contract. The total value of this FMS contract now touches $395 million.
In the second award, Boeing won a $15.5 million modification contract to a previously awarded firm-fixed-price FMS contract. This contract calls for the defense contractor major to supply Apache Block III aircraft to Saudi Arabia.
Lastly, a minor firm-fixed-price FMS contract entitles Boeing to provide sustainment services for Apache AH-64D attack helicopters operated by the Dutch military. The contract has a value of $7.7 million.
Based in Chicago, The Boeing Company together with its subsidiaries engages in the design, development, manufacture, sale, and support of aerospace and defense products as well as commercial jetliners.
Boeing is one of the major players in the defense business, which accounts for approximately half of its top line. Boeing’s defense business stands out among its peers, like Lockheed Martin Corp. (LMT - Analyst Report), Northrop Grumman Corp. (NOC - Analyst Report) and General Dynamics Corp. (GD - Analyst Report), by virtue of its broadly diversified programs, strong order bookings and order backlog.
During the first quarter of 2013, the company’s backlog increased to a record $392 billion that included $20 billion of net orders. Some of Boeing’s important programs like the F/A-18 fighter jet and its carrier based version EA-18G Growler, P-8A Chinook helicopter, Apache and Osprey rotorcraft, and the brigade combat team modernization program, are on the focus list of the U.S. DoD.
However, defense contractors, including Boeing, have not been spared from the negative impacts of sequestration. The company has nonetheless tackled the situation well with various DoD contracts, though small in sizes, as well as through commercial deals.
Boeing currently carries a Zacks Rank #2 (Buy).