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Boeing Wins $40M Navy Deal to Procure Spare Parts of F/A-18
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The Boeing Company (BA - Free Report) recently secured modification contract for procuring spare parts of F/A-18 aircraft. Valued at $40 million, the deal was awarded by the Naval Air Systems Command, Patuxent River, Maryland.
The work will be carried out in Bloomington, MN; Linthicum, MD; and Irvine, CA. It is expected to be completed in August 2020. Fiscal 2018 aircraft procurement and working capital funds (Navy) will be utilized to finance the task.
Growing Demand of F/A-18
Boeing’s Super Hornet aircraft is consistently evolving to outpace future threats. In fact, its radar, mission computers and sensors is continuously developing in order to meet extensive mission profiles. Due to the ever rising worldwide demand of military aircraft, Boeing has also developed the Advanced Block III Super Hornet to complement existing and future air-wing capabilities, which includes battle-space situational awareness, counter stealth targeting, increased acceleration and improved survivability.
Such major developments have enabled Boeing to witness solid demand for its fighter aircraft and major aerospace programs, including the F-18 aircraft. This is evident from the contract that the company secured from Kuwait in first-quarter 2018 for delivering 28 F-18 Super Hornets. We believe that this latest deal will also help Boeing fortify its jet fighters’ position in the global market.
Our View
As Boeing’s key forte lies in manufacturing combat-proven aircraft, it has inevitably secured large number of contracts from the Pentagon for long owing to its proven expertise in aerospace programs. Subsequently, revenues at its Defense, Space & Security (BDS) segment witnessed a 9% rise year over year to $5.59 billion in second-quarter 2018.
Furthermore, Boeing’s recently completed KLX Inc acquisition will enable the aircraft major to enhance its global parts distribution and supply chain services, and accelerate Global Service’s growth strategies. The deal will also enable the company to effectively serve customers in a $2.6-trillion, 10-year services market.
Meanwhile, the U.S. Senate approved the fiscal 2019 defense budget, which provisions for major war fighting investments worth $21.7 billion for aircraft. This should boost the profit margins of military jet makers like Boeing.
Price Movement
In a year’s time, shares of Boeing have gained 39.7% compared with the industry’s 18.3% rally. The outperformance 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.
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 exceeded 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%.
Huntington Ingalls outpaced the Zacks Consensus Estimate in the trailing four quarters, with an average beat of 9.48%. It has a long-term earnings growth rate of 15%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Boeing Wins $40M Navy Deal to Procure Spare Parts of F/A-18
The Boeing Company (BA - Free Report) recently secured modification contract for procuring spare parts of F/A-18 aircraft. Valued at $40 million, the deal was awarded by the Naval Air Systems Command, Patuxent River, Maryland.
The work will be carried out in Bloomington, MN; Linthicum, MD; and Irvine, CA. It is expected to be completed in August 2020. Fiscal 2018 aircraft procurement and working capital funds (Navy) will be utilized to finance the task.
Growing Demand of F/A-18
Boeing’s Super Hornet aircraft is consistently evolving to outpace future threats. In fact, its radar, mission computers and sensors is continuously developing in order to meet extensive mission profiles. Due to the ever rising worldwide demand of military aircraft, Boeing has also developed the Advanced Block III Super Hornet to complement existing and future air-wing capabilities, which includes battle-space situational awareness, counter stealth targeting, increased acceleration and improved survivability.
Such major developments have enabled Boeing to witness solid demand for its fighter aircraft and major aerospace programs, including the F-18 aircraft. This is evident from the contract that the company secured from Kuwait in first-quarter 2018 for delivering 28 F-18 Super Hornets. We believe that this latest deal will also help Boeing fortify its jet fighters’ position in the global market.
Our View
As Boeing’s key forte lies in manufacturing combat-proven aircraft, it has inevitably secured large number of contracts from the Pentagon for long owing to its proven expertise in aerospace programs. Subsequently, revenues at its Defense, Space & Security (BDS) segment witnessed a 9% rise year over year to $5.59 billion in second-quarter 2018.
Furthermore, Boeing’s recently completed KLX Inc acquisition will enable the aircraft major to enhance its global parts distribution and supply chain services, and accelerate Global Service’s growth strategies. The deal will also enable the company to effectively serve customers in a $2.6-trillion, 10-year services market.
Meanwhile, the U.S. Senate approved the fiscal 2019 defense budget, which provisions for major war fighting investments worth $21.7 billion for aircraft. This should boost the profit margins of military jet makers like Boeing.
Price Movement
In a year’s time, shares of Boeing have gained 39.7% compared with the industry’s 18.3% rally. The outperformance 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.
Zacks Rank & Key Picks
Boeing currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the same space are Lockheed Martin (LMT - Free Report) , Engility Holdings and Huntington Ingalls (HII - Free Report) , each carrying a Zacks Rank #2 (Buy). 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 exceeded 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%.
Huntington Ingalls outpaced the Zacks Consensus Estimate in the trailing four quarters, with an average beat of 9.48%. It has a long-term earnings growth rate of 15%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>