In a series of contracts worth $340 million that were handed out by the Department of Defense Boeing Company (BA - Analyst Report) received a major share. The company clinched three back-to-back contracts valuing over $100 million.
The biggest was the $75.6 million foreign military sales contract to develop a courseware to offer flight training to the Royal Saudi Air Force to fly a variant of Boeing’s F-15 fighter jet, the non-commercial F-15SA. The contract is expected to be concluded by Jul 19, 2019. The tasks relating to the contract will be performed in St. Louis, Mo., and King Khalid Air Base, Khamis Mushayt, Kingdom of Saudi Arabia.
The second was a $17.0 million contract for phase 1 work to assimilate Raytheon Company's (RTN - Analyst Report) new Next Generation Jammer hardware into Boeing's EA-18G Growler electronic warfare aircraft. The project’s work is anticipated to continue through Oct 2014.
The final contract worth $8.1 million was for the delivery of 84 AYC 1439 A1 retrofit kits to fulfill the modernization needs of Navy F/A-18 E/F fighter jets. This contract is likely to be finished by Feb 2016.
Boeing has been successful in securing sizeable contracts from the government. Most notable of them was the $1.1 billion contract received by United Launch Alliance, its joint venture with Lockheed Martin Corp (LMT - Analyst Report), for the production of the Evolved Expendable Launch Vehicle.
The company has also performed well in the commercial airspace arena. At the Paris Air Show, Boeing emerged as a clear winner with a lofty 692 airplane orders which will boost the company’s future growth trajectory. The defense and aerospace major even outpaced its rival, Airbus, in terms of deliveries made in the first six months of this year.
We believe a steady stream of domestic as well as international orders will ensure future profitability for the company. Boeing currently holds a Zacks Rank #1(Strong Buy).
Apart from Boeing another defense operator with encouraging prospects is Zacks Ranked #2 (Buy) European Aeronautic Defence and Space Company EADS N.V. (EADSY).