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Boeing (BA) Wins $33M Deal to Rebuild Apache AH-64E Aircraft

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The Boeing Company (BA - Free Report) recently secured a $32.6-million contract for incorporating certain changes for the remanufacture of 12 Apache aircraft and six-part numbers for tail rotor blades. Work related to the deal will be performed in Mesa, AZ, and is scheduled to be completed by Oct 1, 2024. The contract has been awarded by the U.S. Army Contracting Command, Redstone Arsenal, AL.

Growing Importance of Apache AH-64E Helicopter

Boeing’s AH-64 Apache has already emerged as the world’s most advanced, multi-role combat helicopter that is used by the U.S. Army, and a growing number of international defense forces. Its AH-64E is the latest version of the AH-64 gunship, which is equipped with new sensors, avionics and improved night operation capabilities.

In addition, it has an infrared suppressing exhaust system, as well as chaff and flare dispensers, which jointly reduce the chances of being hit by enemy air defense missiles.

Notably, militaries of nations, such as India, the U.K., the Netherlands, Morocco, Israel and Egypt, among many others, alongside the United States, have the Apache Helicopters in their arsenal.

What Favors Boeing’s Growth Prospects?

Boeing, till date, has already delivered more than 2,400 Apache helicopters to customers across the globe. In recent times, increasing geopolitical tensions across the world have prompted both developed and developing nations to effectively increase their defense budget. It is imperative to mention in this context that the U.S. fiscal 2022 defense budget reflects funding worth $753 billion for the U.S. defense programs, implying an annual increase of 1.7%. Interestingly, a sum of $825 million has been separately allotted to procure 30 Boeing's AH-64E Apache Attack Helicopters. If approved, orders for Boeing’s wide variety of military products will likely increase, in turn, boosting the company’s growth prospects.

Per a report by Mordor Intelligence firm, the global military rotorcraft market is projected to witness a CAGR of 3% during the 2020-2025 period. Substantial fleet modernization plans of the militaries deploying AH-64 Apache, along with other new and advanced attack helicopters, are anticipated to support the market’s growth during the forecasted period.

Such projections bode well for helicopter-makers alongside Boeing, such as Airbus SE (EADSY - Free Report) , Boeing’s arch-rival, and other defense giants like Lockheed Martin (LMT - Free Report) and Textron (TXT - Free Report) .

Price Movement and Zacks Rank

Shares of Boeing, a Zacks Rank #3 (Hold) company, have gained 27.9% in the past year compared with the industry’s growth of 16.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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