Boeing Gets a $278M Deal to Support the F/A-18 Program

Boeing Company NYSE:BA

The Boeing Company (NYSE:BA) recently secured a contract with the F/A 18 aircraft program. Defense Logistics Agency Aviation, Philadelphia, Pennsylvania, is the organization presenting the prize.

This $278 million contract is anticipated to be finished on August 8, 2027. Per the agreement, Boeing will purchase F/A-18 jet aircraft consumable parts.

Effects of F/A-18 Jets

The F/A-18 Block III Super Hornet from Boeing is a twin-engine, supersonic, all-weather multirole fighter jet that can carry almost any tactical mission. The Super Hornet, according to Boeing, is the most economical aircraft in the tactical aviation fleet of the United States, costing less per flight hour than any other tactical aircraft in the fleet.

Combat aircraft like the F/A-18 Super Hornet has become the weapon of choice for the military worldwide. In addition to the U.S. Navy, other air forces frequently use these fighters, including the Royal Australian Air Force and the Kuwaiti Air Force. In addition, countries including Canada, Finland, Switzerland, and Spain currently possess Boeing’s Super Hornet.

The recent contract win is evidence of the F/A-18 fleet’s robust demand in the aviation market.

Boeing And Other Combat Jet Producers’ Future Prospects

Emerging economies in the Asia Pacific, the Middle East, and South America are investing heavily in bolstering their defense capacities due to mounting security concerns worldwide. Wealthy nations like the United States and Europe have already dominated the defense business. As the world’s most significant exporter of weaponry, the United States has been spending heavily on defense-related goods, with combat aircraft holding one of the dominant positions. Boeing dominates the market for combat aircraft because it is the biggest aircraft manufacturer in the country.

According to a Mordor Intelligence analysis, North America will account for the highest proportion of the global market for combat aircraft between 2021 and 2026, with a CAGR of 2.5% predicted. The increase in global dangers, geopolitical unrest, and defense spending are to blame for this expansion. Along with other U.S.-based combat jet producers like Northrop Grumman (NYSE:NOC), Lockheed Martin (NYSE:LMT), and Textron (NYSE:TXT), Boeing should gain from these estimates.

Research, design, development, production, integration, maintenance, support, and upgrade of sophisticated military aircraft, including combat and air mobility aircraft, uncrewed air vehicles, and related technologies, are all part of Lockheed’s Aeronautics business segment’s activities. The F-35, C-130 Hercules, F-16 Fighting Falcon, and F-22 Raptor are some of its most important programs.

Earnings for Lockheed Martin in the second quarter of 2022 were 0.5% higher than the $6.29 consensus estimate from Zacks. The company’s average profit surprise for the previous four quarters was 64.46%.

Northrop Grumman has been a leader in creating human-crewed combat aircraft since its debut. Additionally, Northrop Grumman has a history of being a technological leader in all facets of military aviation and aircraft, including manned and unmanned, targeting, surveillance, and aircraft self-protection systems that let warfighters complete missions whenever, wherever, and under any circumstances.

Earnings for Northrop Grumman’s second quarter of 2022 were 0.5% higher than the Zacks Consensus Estimate of $6.03. The company’s average earnings surprise for the previous four quarters was 3.92%.

Textron’s business arm, known as Textron Aviation Defense, creates, manufactures, and provides support for adaptable and well-recognized military aircraft favored for training and attack operations. The AT-6 Wolverine and the Beechcraft T-6C trainer are two of Textron’s well-known products.

The Zacks Consensus Estimate of $0.88 for Textron’s second quarter 2022 profits was outperformed by 13.6%. The company’s average earnings surprise for the previous four quarters was 11.28%.

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About the author: Stephanie Bedard-Chateauneuf has over six years of experience writing financial content for various websites. Over the years, Stephanie has covered various industries, with a primary focus on tech stocks, consumer stocks, health stocks, and personal finance. This stock lover likes to invest for the long-term. Stephanie has an MBA in finance.