3 DoD Order Wins at Boeing

Zacks

Aerospace and defense major The Boeing Company (BA) won three defense contracts on Monday, Dec 30, lifting its share price by 0.4% to close at $136.49 on Dec 31, 2013.

The largest one, worth $750 million, came from the U.S. Air Force for the continued support and maintenance work on the B-1 bomber. This contract win entails work in Oklahoma City with Tinker Air Force Base appointed as the contracting party. The contract is expected to continue till Dec 31, 2014 at least. Per this contract, Boeing will provide complete design engineering work, maintenance engineering, computer network support, technical analysis, and other work on the aircraft and weapons systems. This contract includes a one-year base period and four one-year extension options.

The second one is a delivery order valued at $46.6 million. It was issued under a prior signed basic ordering agreement to provide integrated logistics and engineering services on F/A-18A-D and F/A-18E/F fighter jets, and also on EA-18G electronic warfare aircraft, operated by the U.S. Navy and the militaries of Australia, Canada, Finland, Kuwait, Malaysia, Spain, and Switzerland. Work is slated  for completion in Dec 2014.

The final contract is a $22.2 million delivery order issued under  an earlier basic ordering agreement. This is mainly to supply automated maintenance environment integrated software for F/A-18E/F fighters and EA-18G electronic warfare aircraft operated by the U.S. Navy and the Australian military only. The work on this contract will be completed by Dec 2015.

Boeing continues to win substantial defense orders besides its flourishing Commercial Airplane business. Recently, the company received a couple of contracts, worth $661 million, from the U.S. Department of Defense. The impressive performance of the company over the last twelve months is also reflected in its traded price. Boeing’s share price climbed 80.6% over 2013.

Boeing currently has a Zacks Rank #3 (Hold). Other better-ranked players in the aerospace/defense sector, which look attractive at current levels, include Lockheed Martin Corporation (LMT), Huntington Ingalls Industries, Inc. (HII) and Northrop Grumman Corporation (NOC). All three carry a Zacks Rank #2 (Buy).

Read the Full Research Report on NOC
Read the Full Research Report on BA
Read the Full Research Report on LMT


Zacks Investment Research

View Comments (0)