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Boeing Wins $145M Deal to Upgrade Poseidon Training System
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Aerospace giant The Boeing Company (BA - Free Report) recently secured a modification contract to provide production concurrency upgrades for the training system of the P-8A Multi-Mission Maritime aircraft, also known as Poseidon. Work related to this deal is expected to be over by Feb 2018.
Details of the Deal
Valued at $144.9 million, this contract was awarded by the Naval Air Warfare Center Training Systems Division Orlando, FL. Through this deal, Boeing aims to support the U.S. Navy and the government of Australia.
Per the terms of the agreement, the upgrades will help the training devices become fully functional, ready to train and meet future capabilities. Majority of the work under the deal will be carried out in Jacksonville, FL, and St. Louis, MI. The rest of the work will be executed at a few other locations across the nation.
The company plans to utilize fiscal 2015 aircraft procurement (Navy) and cooperative agreement funds to finance this contract. Notably, the U.S. Navy has funded 91% of this deal while the Australian government took care of the remaining.
A Brief Note on P-8A
Poseidon is a long-range anti-submarine warfare, anti-surface warfare, intelligence, surveillance and reconnaissance aircraft, developed specifically for the U.S. Navy. It is also capable of executing broad-area maritime and littoral operations.
Our View
Being the world’s largest aircraft manufacturer, Boeing enjoys a distinguished position in the aerospace and defense industry. The company has been receiving a steady flow of contracts from the Pentagon and international customers for its varied defense programs.
Interestingly, at a time when unmanned air systems (UAS) are gaining rapid traction, the U.S. Navy continues to have a preference for Boeing’s P-8A. This might be because of the jet’s extensive operational capabilities, including UAS networked operations, as well as reduced development and manufacturing costs related to P-8A.
The company’s recently released first-quarter 2017defense deliveries totaled 42, down from 50 a year ago. However, the reported figure was up from 40 in the preceding quarter. These deliveries include four P-8 models. Last year, Boeing won a contract worth $2.5 billion from the U.S. Navy for 20 P-8 Poseidon aircraft. Going ahead, more such contracts are expected to bolster Boeing’s growth trajectory.
On Mar 16, along with the fiscal 2018 budget, President Trump’s administration proposed additional fiscal 2017 appropriations. These appropriations seek to put in $13.5 billion for the procurement and modernization of additional Army Apache and Blackhawk helicopters, F-35 and F/A-18 fighter aircraft, tactical missiles, unmanned aircraft systems and Terminal High Altitude Area Defense interceptors. Without a doubt, such high spending will boost business for defense biggies, in particular Boeing and Lockheed Martin Corp. (LMT - Free Report) that manufacture such defense equipment.
Price Performance
Shares of Boeing gained 39.8% over the last 12 months, outperforming the Zacks categorized Aerospace–Defense industry’s gain of 25.6%. The outperformance was led by the company’s strong balance sheet and cash flow, which provided it with financial flexibility in terms of raising dividend, repurchasing shares and pursuing acquisitions. The company also poses solid competition to the likes of Lockheed Martin, General Dynamics Corp. (GD - Free Report) and Huntington Ingalls Industries, Inc. (HII - Free Report) .
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
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Boeing Wins $145M Deal to Upgrade Poseidon Training System
Aerospace giant The Boeing Company (BA - Free Report) recently secured a modification contract to provide production concurrency upgrades for the training system of the P-8A Multi-Mission Maritime aircraft, also known as Poseidon. Work related to this deal is expected to be over by Feb 2018.
Details of the Deal
Valued at $144.9 million, this contract was awarded by the Naval Air Warfare Center Training Systems Division Orlando, FL. Through this deal, Boeing aims to support the U.S. Navy and the government of Australia.
Per the terms of the agreement, the upgrades will help the training devices become fully functional, ready to train and meet future capabilities. Majority of the work under the deal will be carried out in Jacksonville, FL, and St. Louis, MI. The rest of the work will be executed at a few other locations across the nation.
The company plans to utilize fiscal 2015 aircraft procurement (Navy) and cooperative agreement funds to finance this contract. Notably, the U.S. Navy has funded 91% of this deal while the Australian government took care of the remaining.
A Brief Note on P-8A
Poseidon is a long-range anti-submarine warfare, anti-surface warfare, intelligence, surveillance and reconnaissance aircraft, developed specifically for the U.S. Navy. It is also capable of executing broad-area maritime and littoral operations.
Our View
Being the world’s largest aircraft manufacturer, Boeing enjoys a distinguished position in the aerospace and defense industry. The company has been receiving a steady flow of contracts from the Pentagon and international customers for its varied defense programs.
Interestingly, at a time when unmanned air systems (UAS) are gaining rapid traction, the U.S. Navy continues to have a preference for Boeing’s P-8A. This might be because of the jet’s extensive operational capabilities, including UAS networked operations, as well as reduced development and manufacturing costs related to P-8A.
The company’s recently released first-quarter 2017defense deliveries totaled 42, down from 50 a year ago. However, the reported figure was up from 40 in the preceding quarter. These deliveries include four P-8 models. Last year, Boeing won a contract worth $2.5 billion from the U.S. Navy for 20 P-8 Poseidon aircraft. Going ahead, more such contracts are expected to bolster Boeing’s growth trajectory.
On Mar 16, along with the fiscal 2018 budget, President Trump’s administration proposed additional fiscal 2017 appropriations. These appropriations seek to put in $13.5 billion for the procurement and modernization of additional Army Apache and Blackhawk helicopters, F-35 and F/A-18 fighter aircraft, tactical missiles, unmanned aircraft systems and Terminal High Altitude Area Defense interceptors. Without a doubt, such high spending will boost business for defense biggies, in particular Boeing and Lockheed Martin Corp. (LMT - Free Report) that manufacture such defense equipment.
Price Performance
Shares of Boeing gained 39.8% over the last 12 months, outperforming the Zacks categorized Aerospace–Defense industry’s gain of 25.6%. The outperformance was led by the company’s strong balance sheet and cash flow, which provided it with financial flexibility in terms of raising dividend, repurchasing shares and pursuing acquisitions. The company also poses solid competition to the likes of Lockheed Martin, General Dynamics Corp. (GD - Free Report) and Huntington Ingalls Industries, Inc. (HII - Free Report) .
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.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
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