Boeing (BA) Wins Deal to Support F/A-18E/F Production Aircraft
The Boeing Company BA recently won a modification contract involving the F/A-18E/F production aircraft. The Naval Air Systems Command, Patuxent River, MD has offered the award.
Details of the Deal
Valued at $18.8 million, the contract is expected to get completed by August 2028. Per the terms of the agreement, Boeing will procure SUU-79C/A wing pylons, SUU-80A/A low drag pylons and ADU-773A/A adapters for F/A-18E/F production aircraft.
The jet giant will also offer sustaining engineering for these aircraft. The majority of the work related to this deal will be executed in Mesa, AZ.
Significance of F/A-18 Jets
Boeing’s F/A-18 Block III Super Hornet is a twin-engine, supersonic, all-weather multirole fighter jet, which is capable of performing virtually every mission in the tactical spectrum. EA-18G is a variant of the combat-proven F/A-18F Super Hornet. Boeing believes that the Super Hornet is the most cost-effective aircraft in the U.S. tactical aviation fleet, costing less per flight hour than any other tactical aircraft in the U.S. forces inventory.
F/A-18 Super Hornet combat aircraft has emerged as the leading choice of weapon for militaries across the world. The Royal Australian Air Force and the Kuwait Air Force, apart from the U.S. Navy, operate these fighter aircraft in large numbers. Furthermore, nations like Canada, Finland, Switzerland and Spain currently have Boeing’s Super Hornet in their arsenal.
The F/A-18 fleet enjoys strong demand in the aircraft market, which is further evident from the latest contract win.
Growth Prospects
With rising security threats across the globe, emerging economies like the Asia Pacific, the Middle East and South America are spending a lot on enhancing their defense arsenals. Developed nations like the United States and Europe have already been leading the defense market. With the United States being the largest weapons exporter worldwide, the nation has been spending amply on defense products, including combat aircraft. Boeing, the largest aircraft manufacturer in the country, thus enjoys a dominant position in the combat aircraft market.
Per a Mordor Intelligence report, the global military aircraft market is expected to witness a CAGR of more than 4% during the 2022-2031 time period, with North America constituting the largest share of this market. Such growth can be attributed to a rise in global threats and geopolitical instabilities and increased spending on defense.
These projections should benefit Boeing along with other U.S.-based combat jet manufacturers like Northrop Grumman NOC, Lockheed Martin LMT and Textron (TXT).
Lockheed’s Aeronautics business segment is engaged in the research, design, development, manufacture, integration, sustainment, support and upgrade of advanced military aircraft, including combat and air mobility aircraft, unmanned air vehicles and related technologies. Its major programs include F-35, C-130 Hercules, F-16 Fighting Falcon and F-22 Raptor jets.
Lockheed Martin boasts a long-term earnings growth rate of 6.1%. The company has a four-quarter average earnings surprise of 63.25%.
Since its inception, Northrop Grumman has been a pioneer in the development of manned aircraft for combat. Northrop Grumman also has a tradition of providing technological leadership in all aspects of military aviation and aircraft, such as manned, unmanned, targeting, surveillance, and aircraft self-protection systems that enable warfighters to accomplish missions anytime, anywhere and under any conditions.
Northrop Grumman boasts a long-term earnings growth rate of 5.7%. The Zacks Consensus Estimate for NOC’s 2022 sales implies an improvement of 2.6% from the 2021 reported figure.
Textron’s business unit, Textron Aviation Defense designs, builds and supports versatile and globally known military aircraft preferred for training and attack missions. Some of Textron’s renowned products include Beechcraft T-6C trainer and AT-6 Wolverine.
Textron boasts a long-term earnings growth rate of 12.7%. The Zacks Consensus Estimate for TXT’s 2022 sales indicates an improvement of 8.2% from the 2021 reported figure.
Price Movement
Shares of Boeing have lost 26.9% in the year-to-date period compared with the industry’s decline of 5.2%.
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Zacks Rank
Boeing currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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