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Boeing Wins Chinook Contract from Department of Defense

The Boeing Company BA has received a foreign military sales (“FMS”) contract for CH-47F Chinook helicopters. This is a modification contract, valued at $308 million. Army Contracting Command, Redstone Arsenal, AL, is the contracting activity.

This FMS contract involves the delivery of 12 CH-47F Chinook helicopters to Holland. The work will be carried out at Ridley Township, PA.

The Boeing CH-47 Chinook is an American twin-engine, tandem rotor heavy-lift helicopter. Its speed of 170 knots is faster than other existing utility and attack helicopters. Its main functions include troop movement, artillery emplacement and battlefield resupply.

The U.S. Army has been using Boeing’s Chinook since 1962. The CH-47F/MH-47G modernization program is now in full-rate production, which will ensure that this tandem rotor medium-lift helicopter remains in the Army at least through the 2030s.

The demand for this helicopter is on the rise, both internationally as well as at home. Last month, Boeing secured a major modification contract from the U.S. Army to revamp as well as deliver Chinook military airlift helicopters. In this $896.9 million contract, Boeing will revamp 27 CH-47F Chinook military airlift helicopters and provide 12 new units. The work is slated for completion by Dec 20, 2020, and will be carried out at Ridley Township, PA.

Meanwhile, Boeing reported the deliveries it made in the first quarter of 2016 on Apr 7, showing an overall rise in completed military platforms year on year. In the defense and space business, Boeing’s deliveries numbered 50, compared with 42 a year ago. However, this aerospace behemoth reported a 4.3% decline in commercial deliveries in the first quarter.

Zacks Rank

Boeing currently holds a Zacks Rank #3 (Hold). Some better-ranked players in the same space are Huntington Ingalls Industries, Inc. HII, HEICO Corporation  HEI and Rockwell Collins Inc. COL. While HEICO and Rockwell Collins sport a Zacks Rank #1 (Strong Buy), Huntington Ingalls carries a Zacks Rank #2 (Buy).

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