The Boeing Company BA recently secured a $51.5-million contract for providing sustainment engineering services to support up to 17 C-40A aircraft. The contract was awarded by the Naval Air Systems Command, Patuxent River, MD.
Per the contract terms, services to be provided by Boeing includes engineering data, technical publications, distribution of technical data and other technical support. Work related to the deal will be performed in Seattle, WA, and is expected to get completed by May 2024.
A Brief Note on C-40A Aircraft
The Boeing C-40A aircraft is a military version of the Boeing 737-700C airline transport, which is used by both the U.S. Navy and the U.S. Air Force. The C-40A Clipper is optimized to transport passengers and cargo around the globe, providing critical logistics support to the U.S. Navy. The aircraft’s flight deck features a flight management computer system with an integrated GPS, and is compatible with future GATM/FANS operating environment.
What Favors Boeing?
Boeing, being one of the major players in the defense business, stands out among its peers by virtue of its broadly diversified programs, strong order bookings and solid backlog. Its defense segment, Boeing Defense, Space & Security (BDS), witnessed a 2% year-over-year increase in first-quarter 2019 revenues to $6.61 billion.
Moreover, the U.S. government proposed the fiscal 2020 defense budget in March 2019, under which the Department of Defense would receive $718 billion, reflecting a 4.9% increase from the prior-year budget. Interestingly, the budget includes a spending plan of $57.7 billion on aircraft, reflecting a massive surge of 166% from the approved fiscal 2019 defense spending on aircraft. If approved, this increased spending provision should usher in more contracts for Boeing’s BDS segment, going ahead.
Shares of the company have gained 6.4% in the past six months, which is in line with the industry’s growth.
Zacks Rank & Key Picks
Boeing currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the same sector are Lockheed Martin Corporation LMT, Northrop Grumman Corporation NOC and Leidos Holdings LDOS, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Lockheed Martin came up with average positive earnings surprise of 17.35% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has increased 4.21% to $20.28 in the past 60 days.
Northrop Grumman Corporation delivered average positive earnings surprise of 18.50% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has climbed 1.85% to $19.29 in the past 60 days.
Leidos Holdings came up with average positive earnings surprise of 6.81% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has risen 1.1% to $4.58 in the past 60 days.
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