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Boeing (BA) Wins $367M Deal to Modify F/A-18 Fighter Jets
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The Boeing Company (BA - Free Report) recently won a modification contract to extend the service life of up to 32 F/A-18 Super Hornet aircraft. The deal has been awarded by the Naval Air Systems Command, Patuxent River, MD.
Valued at $366.5 million, the contract is scheduled to be completed by May 2024. The majority of work related to this deal will be executed in San Antonio, TX.
Significance of F/A-18 Jets
Boeing’s F/A-18 Block III Super Hornet is a twin-engine, supersonic, all-weather multirole fighter jet, which is capable of performing virtually every mission in the tactical spectrum. Boeing believes that the Super Hornet is the most cost-effective aircraft in the U.S. tactical aviation fleet, costing less per flight hour than any other tactical aircraft in the U.S. forces inventory.
F/A-18 Super Hornet combat aircraft has emerged as the leading choice of weapon for militaries across the world. The Royal Australian Air Force and the Kuwait Air Force, apart from the U.S. Navy, operate these fighter aircraft in large numbers. Furthermore, nations like Canada, Finland, Switzerland and Spain currently have Boeing’s Super Hornet in their arsenal.
The F/A-18 fleet enjoys strong demand in the aircraft market, which is further evident from the latest contract win.
Growth Prospects
With rising security threats across the globe, emerging economies like the Asia Pacific, the Middle East and South America are spending a lot on enhancing their defense arsenals. Meanwhile, developed nations like the United States and Europe have already been leading the defense market. With the United States being the largest weapons exporter worldwide, the nation has been spending amply on defense products, wherein the combat aircraft enjoys one of the dominating positions. Boeing, being the largest aircraft manufacturer in the United States, thus enjoys a dominant position in the combat aircraft market.
Looking ahead, per a Mordor Intelligence report, the global combat aircraft market is expected to witness a CAGR of 2.5% during the 2021-2026 time period, with North America constituting the largest share of this market. Such growth can be attributed to a rise in global threats and geopolitical instabilities, and increased spending on defense. These projections should benefit Boeing along with other U.S.-based combat jet manufacturers like Northrop Grumman (NOC - Free Report) , Lockheed Martin (LMT - Free Report) and Textron (TXT - Free Report) .
Lockheed’s Aeronautics business segment is engaged in the research, design, development, manufacture, integration, sustainment, support and upgrade of advanced military aircraft, including combat and air mobility aircraft, unmanned air vehicles and related technologies. Its major programs include F-35, C-130 Hercules, F-16 Fighting Falcon and F-22 Raptor jets.
Lockheed Martin reported third-quarter 2021 adjusted earnings of $6.66 per share, which surpassed the Zacks Consensus Estimate by a whopping 239.8%. LMT stock has gained 35.8% in the past five years.
Since its inception, Northrop Grumman has been a pioneer in the development of manned aircraft for combat. Northrop Grumman also has a tradition of providing technological leadership in all aspects of military aviation and aircraft, such as manned, unmanned, targeting, surveillance, and aircraft self-protection systems that enable warfighters to accomplish missions anytime, anywhere and under any conditions.
Northrop Grumman reported third-quarter 2021 earnings of $6.63 per share, which surpassed the Zacks Consensus Estimate of $5.93 by 11.8%. NOC stock has gained 58.6% in the past five years.
Textron’s business unit, Textron Aviation Defense designs, builds and supports versatile and globally known military aircraft preferred for training and attack missions. Some of Textron’s renowned products include Beechcraft T-6C trainer and AT-6 Wolverine.
Textron reported third-quarter 2021 adjusted earnings of 85 cents per share, which exceeded the Zacks Consensus Estimate of 75 cents by 13.3%. TXT stock has gained 53.9% in the past five years.
Price Movement
Shares of BA have lost 11.5% in the past 12 months compared with the industry’s decline of 33.2%.
Image: Bigstock
Boeing (BA) Wins $367M Deal to Modify F/A-18 Fighter Jets
The Boeing Company (BA - Free Report) recently won a modification contract to extend the service life of up to 32 F/A-18 Super Hornet aircraft. The deal has been awarded by the Naval Air Systems Command, Patuxent River, MD.
Valued at $366.5 million, the contract is scheduled to be completed by May 2024. The majority of work related to this deal will be executed in San Antonio, TX.
Significance of F/A-18 Jets
Boeing’s F/A-18 Block III Super Hornet is a twin-engine, supersonic, all-weather multirole fighter jet, which is capable of performing virtually every mission in the tactical spectrum. Boeing believes that the Super Hornet is the most cost-effective aircraft in the U.S. tactical aviation fleet, costing less per flight hour than any other tactical aircraft in the U.S. forces inventory.
F/A-18 Super Hornet combat aircraft has emerged as the leading choice of weapon for militaries across the world. The Royal Australian Air Force and the Kuwait Air Force, apart from the U.S. Navy, operate these fighter aircraft in large numbers. Furthermore, nations like Canada, Finland, Switzerland and Spain currently have Boeing’s Super Hornet in their arsenal.
The F/A-18 fleet enjoys strong demand in the aircraft market, which is further evident from the latest contract win.
Growth Prospects
With rising security threats across the globe, emerging economies like the Asia Pacific, the Middle East and South America are spending a lot on enhancing their defense arsenals. Meanwhile, developed nations like the United States and Europe have already been leading the defense market. With the United States being the largest weapons exporter worldwide, the nation has been spending amply on defense products, wherein the combat aircraft enjoys one of the dominating positions. Boeing, being the largest aircraft manufacturer in the United States, thus enjoys a dominant position in the combat aircraft market.
Looking ahead, per a Mordor Intelligence report, the global combat aircraft market is expected to witness a CAGR of 2.5% during the 2021-2026 time period, with North America constituting the largest share of this market. Such growth can be attributed to a rise in global threats and geopolitical instabilities, and increased spending on defense. These projections should benefit Boeing along with other U.S.-based combat jet manufacturers like Northrop Grumman (NOC - Free Report) , Lockheed Martin (LMT - Free Report) and Textron (TXT - Free Report) .
Lockheed’s Aeronautics business segment is engaged in the research, design, development, manufacture, integration, sustainment, support and upgrade of advanced military aircraft, including combat and air mobility aircraft, unmanned air vehicles and related technologies. Its major programs include F-35, C-130 Hercules, F-16 Fighting Falcon and F-22 Raptor jets.
Lockheed Martin reported third-quarter 2021 adjusted earnings of $6.66 per share, which surpassed the Zacks Consensus Estimate by a whopping 239.8%. LMT stock has gained 35.8% in the past five years.
Since its inception, Northrop Grumman has been a pioneer in the development of manned aircraft for combat. Northrop Grumman also has a tradition of providing technological leadership in all aspects of military aviation and aircraft, such as manned, unmanned, targeting, surveillance, and aircraft self-protection systems that enable warfighters to accomplish missions anytime, anywhere and under any conditions.
Northrop Grumman reported third-quarter 2021 earnings of $6.63 per share, which surpassed the Zacks Consensus Estimate of $5.93 by 11.8%. NOC stock has gained 58.6% in the past five years.
Textron’s business unit, Textron Aviation Defense designs, builds and supports versatile and globally known military aircraft preferred for training and attack missions. Some of Textron’s renowned products include Beechcraft T-6C trainer and AT-6 Wolverine.
Textron reported third-quarter 2021 adjusted earnings of 85 cents per share, which exceeded the Zacks Consensus Estimate of 75 cents by 13.3%. TXT stock has gained 53.9% in the past five years.
Price Movement
Shares of BA have lost 11.5% in the past 12 months compared with the industry’s decline of 33.2%.
Zacks Rank
Boeing currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.