The Boeing Company (BA – Free Report) recently won a contract with the P-8A aircraft program. The Naval Air Warfare Center Training Systems Division, Orlando, FL awarded the deal.
Details of the deal
Valued at $ 55.4 million, the contract is expected to be completed by July 2025. According to the terms, Boeing training systems will supply hardware for P-8A such as Operational Flight Trainer, Weapons Tactics Trainer, Virtual Maintenance Trainer, Maintenance Support Cabinet and a few more.
The contract will serve the Government of Korea.
Importance of P-8A Poseidon
The P-8A Poseidon, a multi-mission maritime patrol aircraft, can perform anti-submarine and anti-surface warfare, intelligence, surveillance and reconnaissance, and search and rescue missions. Seven nations around the world have selected the P-8A as their future maritime patrol aircraft, including South Korea and New Zealand. In February 2020, the British Royal Air Force (RAF) received its first P-8A jets, while in March 2021 Boeing had a $ 1.6 billion contract for the production and delivery of 11 P-8A jets to the US Navy. and won the Government of Australia. .
Last month, the company won another $ 757 million contract for the production and delivery of 12 P-8A jets in Germany. Such frequent contract inflows, including the recent ones, point to the global demand that this jet model enjoys.
What makes Boeing favored?
Of the various defense equipment that Boeing manufactures, the company’s strength lies in the development of proven fighter jets such as the P-8A Poseidon. In addition, Boeing began military air refueling and strategic transport aircraft to develop its fixed-wing military aircraft programs. Such remarkable developments are expected to fuel the growth of this aerospace giant, taking into account the increase in defense spending made by the current US administration.
As the largest jet manufacturer in the United States, Boeing enjoys a smooth flow of contracts for military jets and associated upgrades. The last contract win is an example of the same.
Growth prospects
According to a Mordor Intelligence report, the global maritime patrol aircraft market is expected to see a CAGR of more than 5% during the 2022-2027 period. The growing threat of global terrorism and geopolitical issues in addition to the need to replace aging maritime patrol aircraft with a new and advanced fleet will likely stimulate the demand for maritime patrol aircraft during the forecast period, thereby strengthening market growth.
Particularly large industry players willing to win from an increase in demand for maritime aircraft include Boeing, Lockheed Martin (LMT – Free post), Textron (txt – Free report) Northrop Grumman (NOC – Free post).
Lockheed’s maritime patrol aircraft, P-3 Orion, performs air, surface and surface patrols and reconnaissance missions over extended periods and far from support facilities.
LMT shares offer long-term earnings growth of 5.7%. The Zacks consensus estimate for 2022 earnings points to a growth of 18.4% from the 2021 reported figure.
Textron’s King Air 260 Jets provide the right balance of durability and operational economy for maritime patrol missions.
TXT stock offers long-term earnings growth of 11.8%. The Zack consensus estimate for 2022 earnings suggests growth of 21.8% from the 2021 reported figure.
Northrop Grumman’s MQ-4C Triton unmanned aerial vehicle system provides real-time intelligence, surveillance and reconnaissance over large oceans and coastal regions.
NOC stock offers long-term earnings growth of 6.2%. The Zack consensus estimate for 2022 sales implies growth of 2.6% from the 2021 reported figure.
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