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Boeing Wins Defense Contracts Worth $510 Million (Revised)

The Boeing Co. BA has secured two major contracts, worth $510.3 million in total, from the U.S. Department of Defense (DoD) on Apr 5.

The larger of the two, worth $275 million, is allotted to conduct research and engineer technology that increases ground-based space capabilities. The latest contract is expected to boost scientific knowledge of these capabilities. The results would be applied to "achieve Air Force and national goals." The contract will run through Nov 3, 2020.

As the latest contract indicates, the Pentagon is paying close attention to defending the vulnerable U.S. government satellites. Last year, the Pentagon said it was planning an initial investment of $5.5 billion over the next five years to enhance protection of space assets and ground networks.

Boeing has also received a $235.3 million modification contract for the procurement of long-lead items for the manufacture and delivery of 11 Lot 8 full-rate production IV P-8A aircraft for the U.S. Navy. The contract will run through Jan 2017 and most of the work will be carried out in Seattle, WA (82.6%); while the rest in Baltimore, MD; Greenlawn, NY; North Amityville, NY and Cambridge, United Kingdom.

Boeing’s P-8A Multi-mission Maritime aircraft, also known as Poseidon, is a long-range anti-submarine warfare, anti-surface warfare, intelligence, surveillance and reconnaissance aircraft developed specifically for the U.S. Navy. It is also capable of executing broad-area maritime and littoral operations.

Boeing receives a steady flow of contracts from the Department of Defense. The company is one of the major players in the defense business. The company’s defense business stands out among its peers by virtue of its broadly diversified programs, strong order bookings and order backlog. Total backlog at the end of the fourth quarter 2015 was $489.3 billion.

Zacks Rank

Boeing currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the aerospace and defense equipment industry include HEICO Corporation HEI, Rockwell Collins Inc. COL and Huntington Ingalls Industries, Inc. HII. While HEICO and Rockwell Collins sport a Zacks Rank #1 (Strong Buy), Huntington Ingalls carries a Zacks Rank #2 (Buy).

(We have re-issued this blog to correct an error. The original version, dated Apr 6, 2016, should no longer be relied upon.)

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