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Boeing Secures $40M Navy Deal to Aid F/A-18 & EA-18 Programs
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The Boeing Company (BA - Free Report) recently clinched a modification contract for procuring aircraft armament equipment to support 12 of the 40th lot’s F/A-18E/F and 14 of the 41st lot’s EA-18G jets. Work related to the deal is scheduled to be completed by November 2022.
Valued at $40.3 million, the contract was awarded by the Naval Air Systems Command, Patuxent River, Maryland. Majority of the work will be executed in Meza, AZ; St. Louis, MO and Grand Rapids, MI.
Boeing will utilize fiscal 2016 and 2017 aircraft procurement (Navy) funds to complete the task.
A Brief Note on F/A-18 and E/A-18
Boeing’s F/A-18 Block III Super Hornet is a twin-engine, supersonic, all weather multirole fighter jet. Being the U.S. Navy’s tactical and air superiority aircraft, it is capable of performing virtually every mission in the tactical spectrum, like air superiority, day/night strike with precision-guided weapons and tanker missions.
Boeing’s EA-18G Growler is the most advanced airborne electronic attack platform, which operates from either an aircraft carrier or from land bases. The Growler aircraft has 11 weapon stations for carrying electronic mission systems and weapons.
What’s Favoring Boeing?
Boeing is one of the major players in the defense business and stands out among its peers by virtue of its broadly diversified programs, strong order bookings and solid backlog. Among the other defense equipment, the company’s key forte has been combat-proven aircraft.
With geo-political tensions spreading rapidly across the globe, nations are increasingly stocking up their military arsenal for any emergency. Military jets, which take part in both offensive as well as defensive counter air operations of a nation, constitute a significant portion of such arsenals. Being a prime defense contractor in the field of aerospace, Boeing has been winning a huge number of contracts from the Pentagon and the foreign allies of the United States.
Coming to the significance of F-18 family of fighter jets, the company’s defense business unit received orders worth $7 billion during the second quarter of 2018. This included order for 18 F-18 jets for the United States along with finalization of the production contract for 28 F-18 to Kuwait. Such solid order inflows make revenue growth prospects of a company bright. We expect the latest contract to also bode well for the company’s growth and further strengthen its financials.
Moreover, the fiscal 2019 defense budget provisions for major war fighting investments worth $21.7 billion, for aircraft. Boeing, being the largest aircraft manufacturer in the United States,will surely be a significant beneficiary from the proposed budget. This financial plan further includes an investment of $2 billion for procuring 24 F/A-18 aircrafts. Moving ahead, such proposed inclusions should boost Boeing’s top-line growth significantly.
Price Movement
In a year’s time, shares of Boeing have soared about 43.5% compared with the industry’s rally of 22.1%. This outperformance can be primarily attributed to significant demand for its military jets along with robust worldwide demand for its commercial aircraft.
Zacks Rank & Key Picks
Boeing currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the same sector are Aerojet Rocketdyne Holdings , Engility Holdings and Huntington Ingalls Industries (HII - Free Report) . While Aerojet Rocketdyne sports a Zacks Rank #1 (Strong Buy), Engility Holdings and Huntington Ingalls carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Aerojet Rocketdyne came up with an average positive earnings surprise of 9.27% in the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings moved north 30.9% to $1.27 over the last 90 days.
Engility Holdings delivered an average positive earnings surprise of 19% in the preceding four quarters. The Zacks Consensus Estimate for 2018 earnings moved up 16.8% to $2.02 over the last 90 days.
Huntington Ingalls pulled off an average positive earnings surprise of 9.48% for the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings climbed 6.4% to $17.24 over the last 90 days.
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Boeing Secures $40M Navy Deal to Aid F/A-18 & EA-18 Programs
The Boeing Company (BA - Free Report) recently clinched a modification contract for procuring aircraft armament equipment to support 12 of the 40th lot’s F/A-18E/F and 14 of the 41st lot’s EA-18G jets. Work related to the deal is scheduled to be completed by November 2022.
Valued at $40.3 million, the contract was awarded by the Naval Air Systems Command, Patuxent River, Maryland. Majority of the work will be executed in Meza, AZ; St. Louis, MO and Grand Rapids, MI.
Boeing will utilize fiscal 2016 and 2017 aircraft procurement (Navy) funds to complete the task.
A Brief Note on F/A-18 and E/A-18
Boeing’s F/A-18 Block III Super Hornet is a twin-engine, supersonic, all weather multirole fighter jet. Being the U.S. Navy’s tactical and air superiority aircraft, it is capable of performing virtually every mission in the tactical spectrum, like air superiority, day/night strike with precision-guided weapons and tanker missions.
Boeing’s EA-18G Growler is the most advanced airborne electronic attack platform, which operates from either an aircraft carrier or from land bases. The Growler aircraft has 11 weapon stations for carrying electronic mission systems and weapons.
What’s Favoring Boeing?
Boeing is one of the major players in the defense business and stands out among its peers by virtue of its broadly diversified programs, strong order bookings and solid backlog. Among the other defense equipment, the company’s key forte has been combat-proven aircraft.
With geo-political tensions spreading rapidly across the globe, nations are increasingly stocking up their military arsenal for any emergency. Military jets, which take part in both offensive as well as defensive counter air operations of a nation, constitute a significant portion of such arsenals. Being a prime defense contractor in the field of aerospace, Boeing has been winning a huge number of contracts from the Pentagon and the foreign allies of the United States.
Coming to the significance of F-18 family of fighter jets, the company’s defense business unit received orders worth $7 billion during the second quarter of 2018. This included order for 18 F-18 jets for the United States along with finalization of the production contract for 28 F-18 to Kuwait. Such solid order inflows make revenue growth prospects of a company bright. We expect the latest contract to also bode well for the company’s growth and further strengthen its financials.
Moreover, the fiscal 2019 defense budget provisions for major war fighting investments worth $21.7 billion, for aircraft. Boeing, being the largest aircraft manufacturer in the United States,will surely be a significant beneficiary from the proposed budget. This financial plan further includes an investment of $2 billion for procuring 24 F/A-18 aircrafts. Moving ahead, such proposed inclusions should boost Boeing’s top-line growth significantly.
Price Movement
In a year’s time, shares of Boeing have soared about 43.5% compared with the industry’s rally of 22.1%. This outperformance can be primarily attributed to significant demand for its military jets along with robust worldwide demand for its commercial aircraft.
Zacks Rank & Key Picks
Boeing currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the same sector are Aerojet Rocketdyne Holdings , Engility Holdings and Huntington Ingalls Industries (HII - Free Report) . While Aerojet Rocketdyne sports a Zacks Rank #1 (Strong Buy), Engility Holdings and Huntington Ingalls carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Aerojet Rocketdyne came up with an average positive earnings surprise of 9.27% in the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings moved north 30.9% to $1.27 over the last 90 days.
Engility Holdings delivered an average positive earnings surprise of 19% in the preceding four quarters. The Zacks Consensus Estimate for 2018 earnings moved up 16.8% to $2.02 over the last 90 days.
Huntington Ingalls pulled off an average positive earnings surprise of 9.48% for the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings climbed 6.4% to $17.24 over the last 90 days.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>