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Boeing Wins $983M Air Force Contract for Support Services

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The Boeing Co.’s (BA - Free Report) business unit, Defense, Space & Security, has won a contract from the U.S. Air Force to provide engineering support services.

Contract Details

The contract is valued at $983 million. It was awarded by the Air Force Life Cycle Management Center, Tinker Air Force Base, OK.

Per the contract, Boeing will provide engineering services and support for recurring and non-recurring activities related to the VC-25, E-4B, C-32A, C-40B/C, E-8C and NT-43 aircraft. The contract covers analysis and technical instructions required to overcome maintenance issues; and non-recurring engineering required to apply retrofit alterations to the aircraft to correct shortages, overcome obsolescence and initiate product development.

Work is scheduled to be completed by Jan 31, 2027 and will be executed in Oklahoma City, OK. The contract will use fiscal 2017 operations and maintenance funds.

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, the company secured a modification contract from the U.S. Air Force for the production of KC-46 Lot 3. Per the contract, valued at $2.1 billion, Boeing will provide 15 KC-46 aircraft, data, two spare engines and five wing refueling pod kits. (Read more: Boeing Secures $2.1B Air Force Contract for KC-46 Aircraft)

Last week, Boeing reported 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, down 1.2% year over year. Backlog at the end of the fourth quarter was $473.0 billion.

Price Movement

Shares of Boeing have gained 39.1% over the last 12 months, outperforming the Zacks categorized Aerospace–Defense industry’s gain of 26.9%. 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 also poses strong competition to its peers including General Dynamics Corp. (GD - Free Report) , Textron, Inc. (TXT - Free Report) and Huntington Ingalls Industries, Inc. (HII - Free Report) .



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.

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