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Boeing Wins $400M Deal to Support B-1 & B-52 Bomber Aircraft

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The Boeing Company (BA - Free Report) recently secured a $400-million contract to provide recurring and non-recurring engineering services to B-1 and B-52 aircraft. The contract was awarded by the Air Force Life Cycle Management, Tinker Air Force Base, Oklahoma City, OK.

Work related to the deal will be performed in Tinker Air Force Base, OK, Edwards Air Force Base, CA, Barksdale Air Force Base, LA, and Oklahoma City, OK, and is expected to get completed by Dec 31, 2019.

Advantages of Boeing’s B-1 & B-52 Bomber

Boeing's B-1 is a long-range, multi-mission, supersonic conventional bomber, which is equipped to carry eight air-launched cruise missiles or 24 SRAMs alongside carrying up to 24 nuclear bombs or 84 500-pound conventional bombs.

The Boeing B-52 primarily provides the U.S. military with immediate nuclear and conventional global strike capabilities. Due to its high mission-capable rate, large payload, long range, persistence and ability to employ both nuclear and conventional precision standoff weapons, the B-52 continues to be a critical contributor to the U.S. National Security Strategy.

What Favors Boeing?

As Boeing’s key forte lies in the manufacturing of combat-proven aircraft, the company has inevitably secured large number of contracts from the Pentagon for long. The recent contract win is again one such example. Also, in recent times, Boeing’s various aerospace programs along with its vast portfolio of associated services are witnessing rapid rise in demand, due to the geopolitical uncertainties looming worldwide. Such growing demand bodes well for the company’s growth, going ahead.

Furthermore, midway last year, the U.S. Senate approved the fiscal 2019 defense budget provisioning for major war fighting investments worth $21.7 billion for aircraft. Such proposed inclusions reflect solid growth prospects for Boeing's Defense, Space & Security Segment (“BDS”) segment, which, in turn, are likely to boost the profit margin.

This, inevitably, will increase demand for the company’s various technical services, pivotal for upgrading military aircraft. Additionally, such proposed inclusions reflect solid growth prospects for the BDS segment.

Price Performance

Shares of Boeing have gained about 8.6% in a year, against the industry’s decline of 7.7%. The outperformance was primarily led by significant demand for the company’s military jets across the globe and robust long-term demand for its commercial aircraft.


Zacks Rank & Other Stocks to Consider

Boeing currently carries a Zacks Rank #1 (Strong Buy).

A few top-ranked companies in the same sector are AeroVironment, Inc. (AVAV - Free Report) , Teledyne Technologies Incorporated (TDY - Free Report) and Lockheed Martin Corporation (LMT - Free Report) .

While AeroVironment and Teledyne Technologies sport a Zacks Rank #1, Lockheed Martin carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AeroVironment came up with average positive earnings surprise of 257.01% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has increased 33.3% to $1.48 in the past 90 days.

Teledyne Technologies came up with average positive earnings surprise of 12.92% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has increased 5.26% to $9.00 in the past 90 days.

Lockheed Martin delivered average positive earnings surprise of 13.92% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has moved up 2.74% to $19.49 in the past 90 days.

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