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Boeing (BA) Wins $169M Air Force Contract to Upgrade Radars

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The Boeing Co. (BA - Free Report) has won a modification contract from the U.S. Air Force (USAF) to upgrade F-15 Combined APG-63 Version 3 (V3) Radar Improvement Program and APG-82 Version 1 Radar Modernization Program (RMP) radar.

Contract Details

The contract is valued at $168.8 million. It was awarded by the Air Force Life Cycle Management Center, Wright-Patterson Air Force Base, OH.

Per the contract, Boeing will provide additional quantity of 18 V3 radars and 16 RMP radars. Apart from this, the company will also offer associated installation, initial spares, support equipment, ICS, tooling and other necessary support.

Work is scheduled to be completed by Feb 28, 2022 and will be executed in St. Louis, MO. The contract will use fiscal 2015, 2016 and 2017 procurement and defense working capital funds.

What’s APG-63 and APG-82?

APG-63 is an all-weather multimode radar system designed by Raytheon Company for the F-15E air superiority fighter. It boasts multi-role capability, long-term support and future growth options. The APG-63 Version 3 radar offers powerful, adaptable radar technology with established performance and strategic flexibility. This innovative, highly reliable technology is compatible with the F-15C and F-15E aircraft.

Raytheon’s APG-82 Version 1 optimizes the F-15E’s multirole mission capability. It includes extended-range, superior multi-target tracking and precision engagement potential. This version also provides enhancement of system reliability over the legacy F-15E APG-70 radar. Moving ahead, this unique level of reliability and maintainability is expected to help the Air Force generate cost savings.

Why Boeing?

Boeing is the manufacturer of the F-15. The company has received several contracts from the Pentagon in the past to install the APG-63 Version 3 radar on its F-15C/D jet fighters and APG-82 radar systems on its F-15E fighter-bombers. With the installation of these radar systems, high-resolution ground-mapping data has been enabled in the F-15, which helps crews identify targets at great distances and increases situational awareness, lethality and survivability.

Moreover, the company witnesses a steady flow of contracts from the Pentagon and other international customers. It is one of the major players in the defense business. Its defense business stands out among its peers by virtue of its broadly diversified programs, strong order bookings and solid backlog.

In March, the company won a contract, worth $371.2 million, for supplying performance-based supply chain support for the F-15 platform. This contract was awarded by the Defense Logistics Agency Aviation, Philadelphia, PA. (Read more: Boeing Wins $371M Contract to Support F-15 Platform)
 
Again, it secured a modification contract from the U.S. Army for supplying lot 7-11 of AH-64E Apache attack helicopters to the government of Saudi Arabia. Valued at $3.28 billion, this foreign military sales (FMS) contract was awarded by the U.S. Army Contracting Command, Redstone Arsenal, AL. (Read more: Boeing Inks $3.3B FMS Deal to Supply AH-64E Apache Copters)

Price Movement

Shares of Boeing have gained 40% over the last 12 months, outperforming the Zacks categorized Aerospace–Defense industry’s gain of 25.1%. This could be because the company’s strong balance sheet and cash flows provide financial flexibility in matters of incremental dividend, ongoing share repurchases and earnings accretive acquisitions. The company also poses strong competition to its peers − General Dynamics Corp. (GD - Free Report) and Huntington Ingalls Industries, Inc. (HII - Free Report) .



Zacks Rank

Boeing currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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