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Boeing (BA) Wins Deal for KC-135 Air Refueling Jet Program
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The Boeing Company (BA - Free Report) recently secured a contract for providing horizontal stabilizers for KC-135 jets. The Defense Logistics Agency Aviation, Oklahoma City, OK, has awarded the deal.
Valued at $122.7 million, the contract is expected to be completed by Apr 30, 2028. Work related to this deal will be carried out in Missouri and Oklahoma.
KC-135 Significance
The KC-135 Stratotanker is an aerial refueling aircraft that provides core aerial refueling capability for the U.S. Air Force and has excelled in this role for more than 60 years. It also provides aerial refueling support to Air Force, Navy, Marine Corps and allied nation aircraft. The KC-135 is also capable of transporting litter and ambulatory patients using patient support pallets during aeromedical evacuations.
Of the original KC-135As, more than 417 were modified with new CFM-56 engines produced by CFM-International. The re-engined tanker, designated either the KC-135R or KC-135T, can offload 50% more fuel, is 25% more fuel efficient, costs 25% less to operate and is 96% quieter than the KC-135A. Under another modification program, a re-engined tanker with the TF-33-PW-102 engine was designated the KC-135E.
Remodeling of the KC-135 fleet indicates strong demand that this particular product line of Boeing has been enjoying over time. This must have been boosting the order flow for Boeing involving KC-135, which in turn should bolster BA’s top line.
Prospects
The air-to-air refueling market has been booming lately with the rapid launch of manned and unmanned aerial systems, driven by increasing demand for combat aircraft and military spending of various countries. Looking ahead, the air-to-air refueling market size is projected to grow from an estimated $501 million in 2020 to $851 million by 2025, at a CAGR of 11.2% during the forecast period, per Markets and Markets firm.
No doubt, such an expanding market space offers ample growth opportunities for Boeing, thereby bolstering revenue prospects. Other defense majors that would reap the benefits of the growing air-to-air refueling market include Airbus (EADSY - Free Report) and Lockheed Martin (LMT - Free Report) .
Airbus’ A330 MRTT is an aerial refueling tanker aircraft based on the civilian Airbus A330. With 60 total aircraft sales as of March 2020, the A330 MRTT has been ordered by Australia, France, NATO, Saudi Arabia, Singapore, South Korea, the United Arab Emirates and the U.K.
Airbus boasts a four-quarter average earnings surprise of 69.02%. The Zacks Consensus Estimate for EADSY’s 2022 sales indicates an improvement of 9.7% from the 2021 reported figure.
Lockheed’s LMXT is America’s next strategic tanker aircraft. Offering a proven airframe with distinct U.S. Air Force-only capabilities, LMXT provides the most advanced and complementary tanker to meet America’s immediate and long-term mission requirements.
Lockheed boasts a long-term earnings growth rate of 5.7%. The Zacks Consensus Estimate for LMT’s 2022 earnings indicates an improvement of 18.3% from the 2021 reported figure.
Price Movement
In the past year, shares of Boeing have lost 25.3% compared to the industry’s 33.4% decline.
Huntington Ingalls boasts a four-quarter average earnings surprise of 22.22%. The Zacks Consensus Estimate for HII’s 2022 earnings indicates an improvement of 14.1% from the 2021 reported figure.
The Zacks Consensus Estimate for HII’s 2022 sales indicates an improvement of 13.9% from the 2021 reported figure. The stock has gained 3.7% in the past six months.
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Boeing (BA) Wins Deal for KC-135 Air Refueling Jet Program
The Boeing Company (BA - Free Report) recently secured a contract for providing horizontal stabilizers for KC-135 jets. The Defense Logistics Agency Aviation, Oklahoma City, OK, has awarded the deal.
Valued at $122.7 million, the contract is expected to be completed by Apr 30, 2028. Work related to this deal will be carried out in Missouri and Oklahoma.
KC-135 Significance
The KC-135 Stratotanker is an aerial refueling aircraft that provides core aerial refueling capability for the U.S. Air Force and has excelled in this role for more than 60 years. It also provides aerial refueling support to Air Force, Navy, Marine Corps and allied nation aircraft. The KC-135 is also capable of transporting litter and ambulatory patients using patient support pallets during aeromedical evacuations.
Of the original KC-135As, more than 417 were modified with new CFM-56 engines produced by CFM-International. The re-engined tanker, designated either the KC-135R or KC-135T, can offload 50% more fuel, is 25% more fuel efficient, costs 25% less to operate and is 96% quieter than the KC-135A.
Under another modification program, a re-engined tanker with the TF-33-PW-102 engine was designated the KC-135E.
Remodeling of the KC-135 fleet indicates strong demand that this particular product line of Boeing has been enjoying over time. This must have been boosting the order flow for Boeing involving KC-135, which in turn should bolster BA’s top line.
Prospects
The air-to-air refueling market has been booming lately with the rapid launch of manned and unmanned aerial systems, driven by increasing demand for combat aircraft and military spending of various countries. Looking ahead, the air-to-air refueling market size is projected to grow from an estimated $501 million in 2020 to $851 million by 2025, at a CAGR of 11.2% during the forecast period, per Markets and Markets firm.
No doubt, such an expanding market space offers ample growth opportunities for Boeing, thereby bolstering revenue prospects. Other defense majors that would reap the benefits of the growing air-to-air refueling market include Airbus (EADSY - Free Report) and Lockheed Martin (LMT - Free Report) .
Airbus’ A330 MRTT is an aerial refueling tanker aircraft based on the civilian Airbus A330. With 60 total aircraft sales as of March 2020, the A330 MRTT has been ordered by Australia, France, NATO, Saudi Arabia, Singapore, South Korea, the United Arab Emirates and the U.K.
Airbus boasts a four-quarter average earnings surprise of 69.02%. The Zacks Consensus Estimate for EADSY’s 2022 sales indicates an improvement of 9.7% from the 2021 reported figure.
Lockheed’s LMXT is America’s next strategic tanker aircraft. Offering a proven airframe with distinct U.S. Air Force-only capabilities, LMXT provides the most advanced and complementary tanker to meet America’s immediate and long-term mission requirements.
Lockheed boasts a long-term earnings growth rate of 5.7%. The Zacks Consensus Estimate for LMT’s 2022 earnings indicates an improvement of 18.3% from the 2021 reported figure.
Price Movement
In the past year, shares of Boeing have lost 25.3% compared to the industry’s 33.4% decline.
Image Source: Zacks Investment Research
Zacks Rank & Key Pick
Boeing currently carries a Zacks #3 (Hold). A better-ranked stock in the same industry is Huntington Ingalls Industries (HII - Free Report) , which holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Huntington Ingalls boasts a four-quarter average earnings surprise of 22.22%. The Zacks Consensus Estimate for HII’s 2022 earnings indicates an improvement of 14.1% from the 2021 reported figure.
The Zacks Consensus Estimate for HII’s 2022 sales indicates an improvement of 13.9% from the 2021 reported figure. The stock has gained 3.7% in the past six months.