Aerospace giant The Boeing Company (BA - Analyst Report) has plans to sell eight AH-64E Apache attack helicopters in a deal worth $500 million to the Indonesian Army. Under this foreign military sales contract, the U.S. will provide Indonesia with the country’s very first Apaches.
Boeing’s Apache, with a cruising speed of 261 kilometers (162.2 miles) per hour, is a twin-engine, four-bladed, two-pilot helicopter that scored high ratings for its engine competency and weapons load. Apache is also noted for its target acquisition potential. The helicopters are fitted with advanced Longbow Fire Control Radar, which is a high-performance tracking and targeting system that was jointly developed by Northrop Grumman Corp. (NOC - Analyst Report) and Lockheed Martin Corp. (LMT - Analyst Report).
The latest contract also entails the U.S. to provide radar, training and maintenance support to the Indonesian army. Apart from the U.S., the militaries of Egypt, Greece, Israel, Japan, Kuwait, the Netherlands, Saudi Arabia, Singapore, the United Arab Emirates and the U.K. have also used Apache models.
Boeing has a unique position as the largest aircraft manufacturer in the world in terms of revenues, orders and deliveries. Besides, it is one of the largest aerospace and defense contractors in the world and its defense business accounts for approximately half of its top line. Also, its revenues are spread across more than 90 countries around the globe.
In addition to expanding its presence in the defense space, Boeing is also an important operator in the commercial airplane market. Boeing has also clinched a deal on Monday with China's Xiamen Airlines for six of its 787 Dreamliners. Xiamen had initially announced its plan to buy Boeing's high-tech, fuel-efficient jetliners, 787-8s, way back in May 2011. The order is worth $1.3 billion at list prices.
Due to the continuing recovery of the global economy, demand for Boeing’s Commercial Airplanes is benefiting from a steady improvement in passenger and freight traffic. Xiamen Airlines has an all-Boeing fleet of 97 airplanes, including 17 737-700s, 74 737-800s and 6 757-200s.
During the first half of 2013, Boeing delivered 306 jetliners, 6.6% higher than the year-ago number. Boeing’s second quarter deliveries of 169 airplanes advanced 12.7% year over year, marking a 15-year high. The company is slated to benefit greatly from improving air traffic which is projected to grow 5% annually over the next two decades.
Boeing also expects U.S. and Canadian airliners to invest about $700 billion for fleet extension over the next 20 years. The 787 grounding notwithstanding, Boeing estimates greater than 60 787s to be delivered in 2013.
Boeing presently has a Zacks Rank #3 (Hold). Other well-placed defense operators having a favorable Zacks Rank include Huntington Ingalls Industries, Inc. (HII - Snapshot Report) with a Zacks Rank #2.