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Boeing Wins $199M Deal for Chinook H-47 Helicopter Support

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The Boeing Company (BA - Free Report) recently clinched a $198.9-million contract to provide logistics support, aft rotor blades and associated containers for its CH-47 Chinook Helicopter.

The contract was awarded by the U.S. Army Contracting Command, Redstone Arsenal, Alabama. The entire task related to the deal is expected to be completed by Sep 30, 2023.

A Brief Note on Boeing’s CH-47 Chinook

The CH-47F is an advanced multi-mission helicopter, which comes with a fully integrated, digital cockpit management system. It is equipped with advanced cargo-handling capabilities that complement the aircraft's mission performance and handling characteristics.

CH-47 Chinook’s Place in Defense

In recent times, military rotorcrafts like the Chinook are being used as part of the comprehensive mission parameters, thanks to the integration of advanced and multiple capabilities instilled in them. Not only the U.S. Army, this heavy-lift helicopter is also being deployed by major militaries across the globe, courtesy of its combat-proven expertise to perform complex and tactical missions, which include air transportation of troops, weapons, and internal and external cargo.

What Favor’s Boeing?

Boeing has successfully produced and delivered reliable, maintainable and mission-ready aircraft, like the H-47 Chinook, along with other military helicopters for its end users. The company has been witnessing strong growth in demand for its rotorcraft and rotary wing programs that include the CH-47 Chinook. This is evident from the contract Boeing won recently for delivering CH-47 helicopters to the Royal Canadian Air Force along with Spain and Saudi Arabia, in the second quarter of 2018. In line with this, the latest contract can be considered as a testament to the solid demand that Boeing enjoys for its combat-proven military jets. This, in turn, is expected to boost the company’s profit region.

Per Research and Markets firm, Global military rotorcraft market is expected to see a CAGR of 4.28%, to $30.7 billion by 2028. Such growth can be attributed to the need for replacing aging fleets and enhancing capabilities pertaining to disaster relief operations. This, in turn, should boost demand for mission critical aircraft manufactured by Boeing. Consequently, the company will benefit from the expanding rotorcraft market, being the largest aircraft manufacturer.

Price Movement

Boeing’s stock has gained 44.5% in the past 12 months compared with the industry’s growth of 23%. The outperformance was primarily led by the robust worldwide demand for its commercial aircraft and military jets.


Zacks Rank & Stocks to Consider

Boeing currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the same sector are Aerojet Rocketdyne Holdings (AJRD - Free Report) , Engility Holdings (EGL - Free Report) and Huntington Ingalls Industries (HII - Free Report) .

While Aerojet Rocketdyne sports a Zacks Rank #1 (Strong Buy), Huntington Ingalls and Engility 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 last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen 30.9% to $1.27 in the last 90 days.

Engility delivered an average positive earnings surprise of 19% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has moved up 16.1% to $2.02 in 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 has moved 6.4% north to $17.24 in the last 90 days.

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