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Bell-Boeing JV Wins a $74M Deal to Repair V-22 Aircraft Parts
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Bell-Boeing, a joint venture (JV) between The Boeing Company (BA - Free Report) and Bell Helicopter — a unit of Textron Inc. (TXT - Free Report) — recently secured a long-term contract in relation to V-22 aircraft. Per the terms of the agreement, the JV will repair 23 items used on the V-22 aircraft.
Valued at $74.2 million, the deal was awarded by the Naval Supply Systems Command Weapon Systems Support, Philadelphia, PA. Work related to this deal will be carried out in Fort Worth, TX and Ridley Park, PA. It is scheduled to be over by August 2019.
The JV will utilize fiscal 2018 and 2019 working capital funds (Navy) to finance the task.
A Brief Note on V-22 Jets
Bell-Boeing’s primary product, V-22 Osprey, is a multi-mission, tiltrotor military aircraft with both vertical as well as short takeoff and landing capabilities. It is designed to combine the functionality of a conventional helicopter with the long-range, high-speed cruise performance of a turboprop aircraft. This military aircraft has the capacity to carry 24 combat troops or up to 20,000 pounds of internal cargo or 15,000 pounds of external cargo. Notably, the CMV-22B, MV-22B and CV-2B are different variants of the V-22 Osprey.
Globally, the V-22 tiltrotor has been deployed in numerous missions, including casualty evacuation, tactical recovery of aircraft and personnel, humanitarian assistance/disaster relief, resupply, VIP transport and theater security cooperation.
Our View
A rapid increase in terror attacks along with the widespread rise of ISIS has compelled nations to strengthen arsenal and bump up defense budget. The present U.S. administration is also in favor of raising defense spending in contrast to the budget sequestration enacted by the prior government.
The recently approved fiscal 2019 defense budget worth $716 billion further supports this fact. Thus, it is obvious that defense majors like Boeing and Textron will receive an increased flow of contracts from the Pentagon for their high-end defense equipment. In fact, the latest contract win by Bell-Boeing mirrors the same. Such contract inflows, in turn, should further drive these two defense contractors’ performances, thereby boosting their respective profit margins.
Price Movement
In a year’s time, Boeing’s shares have soared about 43.1%, outperforming the industry’s 18.9% growth. This impressive performance was driven by the company’s record backlog supporting revenue growth, increased orders for commercial airplanes and expanded presence in domestic as well as international markets.
Meanwhile, Textron’s shares have gained around 34.3% in a year, ahead of the industry’s rally. This upside can be attributed to the company’s solid order growth along with its new product developments.
Lockheed Martin surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with an average beat of 9.10%. It has a long-term earnings growth rate of 7.30%.
Engility outpaced the Zacks Consensus Estimate in the trailing four quarters, with an average beat of 19%. It has a long-term earnings growth rate of 5%.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Bell-Boeing JV Wins a $74M Deal to Repair V-22 Aircraft Parts
Bell-Boeing, a joint venture (JV) between The Boeing Company (BA - Free Report) and Bell Helicopter — a unit of Textron Inc. (TXT - Free Report) — recently secured a long-term contract in relation to V-22 aircraft. Per the terms of the agreement, the JV will repair 23 items used on the V-22 aircraft.
Valued at $74.2 million, the deal was awarded by the Naval Supply Systems Command Weapon Systems Support, Philadelphia, PA. Work related to this deal will be carried out in Fort Worth, TX and Ridley Park, PA. It is scheduled to be over by August 2019.
The JV will utilize fiscal 2018 and 2019 working capital funds (Navy) to finance the task.
A Brief Note on V-22 Jets
Bell-Boeing’s primary product, V-22 Osprey, is a multi-mission, tiltrotor military aircraft with both vertical as well as short takeoff and landing capabilities. It is designed to combine the functionality of a conventional helicopter with the long-range, high-speed cruise performance of a turboprop aircraft. This military aircraft has the capacity to carry 24 combat troops or up to 20,000 pounds of internal cargo or 15,000 pounds of external cargo. Notably, the CMV-22B, MV-22B and CV-2B are different variants of the V-22 Osprey.
Globally, the V-22 tiltrotor has been deployed in numerous missions, including casualty evacuation, tactical recovery of aircraft and personnel, humanitarian assistance/disaster relief, resupply, VIP transport and theater security cooperation.
Our View
A rapid increase in terror attacks along with the widespread rise of ISIS has compelled nations to strengthen arsenal and bump up defense budget. The present U.S. administration is also in favor of raising defense spending in contrast to the budget sequestration enacted by the prior government.
The recently approved fiscal 2019 defense budget worth $716 billion further supports this fact. Thus, it is obvious that defense majors like Boeing and Textron will receive an increased flow of contracts from the Pentagon for their high-end defense equipment. In fact, the latest contract win by Bell-Boeing mirrors the same. Such contract inflows, in turn, should further drive these two defense contractors’ performances, thereby boosting their respective profit margins.
Price Movement
In a year’s time, Boeing’s shares have soared about 43.1%, outperforming the industry’s 18.9% growth. This impressive performance was driven by the company’s record backlog supporting revenue growth, increased orders for commercial airplanes and expanded presence in domestic as well as international markets.
Meanwhile, Textron’s shares have gained around 34.3% in a year, ahead of the industry’s rally. This upside can be attributed to the company’s solid order growth along with its new product developments.
Zacks Rank
Textron currently carries a Zacks Rank #2 (Buy), while Boeing has a Zacks Rank #3 (Hold). A few top-ranked stocks in the same space include Lockheed Martin (LMT - Free Report) and Engility Holdings , each carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Lockheed Martin surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with an average beat of 9.10%. It has a long-term earnings growth rate of 7.30%.
Engility outpaced the Zacks Consensus Estimate in the trailing four quarters, with an average beat of 19%. It has a long-term earnings growth rate of 5%.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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