Boeing (BA) Wins $170M Deal to Support Apache Aircraft Production
The Boeing Company BA recently secured a contract to support long lead effort related to the full-rate production of the 12th lot of Apache helicopters. The award has been offered by the U.S. Army Contracting Command, Redstone Arsenal, AL.
Valued at $169.5 million, the contract is expected to be completed by May 31, 2027. Work related to this deal will be conducted in Mesa, AZ.
Growing Importance of Apache Helicopter
Boeing’s AH-64 Apache has already emerged as the world’s most advanced, multi-role combat helicopter that is used by the U.S. Army, and a growing number of international defense forces. Its AH-64E is the latest version of the AH-64 gunship, which is equipped with new sensors, avionics and improved night operation capabilities.
In addition, it has an infrared suppressing exhaust system, as well as chaff and flare dispensers, which jointly reduce the chances of being hit by enemy air defense missiles.
Notably, militaries of nations, such as India, the U.K., the Netherlands, Morocco, Israel and Egypt, among many others, alongside the United States, have Apache helicopters in their arsenal.
What Favors Boeing’s Growth Prospects?
To date, Boeing has delivered more than 2,400 Apache helicopters to customers across the globe. In recent times, increasing geopolitical tensions across the world have prompted both developed and developing nations to effectively increase their defense budget. It is imperative to mention in this context that the U.S. fiscal 2022 defense budget reflects funding worth $753 billion for the U.S. defense programs, implying an annual increase of 1.7%. Interestingly, a sum of $825 million has been allotted to procure 30 Boeing's AH-64E Apache Attack Helicopters. If approved, orders for Boeing’s wide variety of military products will likely increase, thereby boosting the company’s growth prospects.
Will Other Helicopter Makers Benefit?
Per a report by Mordor Intelligence firm, the global military rotorcraft market is projected to witness a CAGR of 3% during the 2020-2025 period. Substantial fleet modernization plans of the militaries deploying new and advanced attack helicopters are anticipated to support the market’s growth during the forecast period.
Such projections bode well for combat helicopter-makers including Boeing, Airbus SE EADSY, Lockheed Martin LMT and Textron TXT.
Price Movement and Zacks Rank
Shares of Boeing, a Zacks Rank #3 (Hold) company, have gained 38% in the past year compared with the industry’s growth of 23.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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