The Boeing Company (BA) received a contract worth $1.53 billion from the U.S. Navy to manufacture P-8A Multi-mission Maritime Aircraft and also provide related logistics, trainers and other support needed for the aircraft.
This new contract, a modification of an earlier contract, requires Boeing to deliver 6 of these aircraft. Boeing plans to deliver the airplanes by January 2013. The majority of the work will be done from its Seattle factory.
P-8APoseidon or multi-mission aircraftis a long-range anti-submarine, anti-surface warfare, intelligence, surveillance and reconnaissance aircraft developed by a Boeing-led team that consists of CFM International, Northrop Grumman Corporation (NOC), Raytheon Co. (RTN), GE Aviation and Spirit AeroSystems Holdings Inc. (SPR).
The U.S. Navy has plans to purchase 117 such P-8A Multi-mission Maritime aircraft. Boeing also has international customers keen on buying this next-generation maritime surveillance aircraft. India is the first international customer with orders for 8 aircraft, with the Australian and Italian navies showing interest.
The contribution in third quarter 2010 from Boeing’s Defense, Space & Security’s declined by 6% year over year to $8.2 billion from $8.7 billion due to lower volume and margins in Network & Space Systems Boeing Military Aircraft.
During the third quarter earnings call, Boeing provided an earnings guidance of $3.80 per share to $4.00 per share for 2010. The Zacks Consensus Estimates for fourth-quarter 2010, fiscal years 2010 and 2011 currently stand at $1.12 , $4.01 and $4.55 per share, respectively.
Boeing’s peer, Lockheed Martin Corporation (LMT), has also recently received a contract worth $831.1 million from the U.S. Navy. The company would provide computer systems for the Space and Naval Warfare Systems Command and other prospective U.S. government and foreign military customers.
The Boeing Company currently retains a Zacks #3 Rank (short-term Hold rating).
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