Boeing Company (BA) has received an extension of contract from NASA to carry out the sustaining engineering work on the International Space Station (ISS). The new $1.24 billion extension contract will begin from October 1, 2010 and will continue over a period of five years.

As per the extended contract, Boeing will provide engineering support for hardware and software on the U.S. segment of the ISS and also on the common hardware and software available to the international partners. Boeing will also manage the ISS subsystems, look into analytical integration and flight support, provide on-orbit engineering support, and finally supervise the ongoing maintenance. Boeing would need to purchase spare components and modify current systems as and when required.

Boeing is involved in this space station project way back from 1995, and with this extension in contract the total value of the project is estimated to reach $16.2 billion. The technical expertise of Boeing will ensure the safety of ISS through 2015, with a vision to extend the operation of the space station until 2028.

The sustaining engineering work will be performed in NASA’s Johnson Space Center in Houston, Kennedy Space Center in Cape Canaveral, Florida and Marshall Space Flight Center in Huntsville, Alabama, as well as at Boeing sites in Houston, Huntsville and Huntington Beach, California.

Boeing’s unit, Boeing Defense, Space & Security, will be entrusted to carry out the sustenance work of the space station. During the second quarter 2010, Boeing Defense, Space & Security contributed $8 billion to Boeing’s total revenue. The revenue guidance for this segment is pegged at $32 billion to $33 billion for 2010. Backlog from the segment, at the end of second-quarter 2010, was $60.6 billion.

Boeing currently retains a Zacks #3 Rank (short-term Hold rating). The positives for the company are its strong order booking, globally diversified customer base and a backlog of $312 billion. However, headwinds expected from the 787 dreamliner along with a possible cutback in the U.S. defense budget keep us sidelined with a Neutral rating on the stock.

 
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