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Boeing Gets Army Contract - Analyst Blog

Monday, November 19, 2012

The Boeing Company (BA) was awarded a $59.6 million firm-fixed-price contract by the U.S. Army Contracting Command, Redstone Arsenal, Alabama. The award will provide for the modification of an existing contract. It exercises option year two on the Performance Based Logistics contract. The scope of the contract involves the Army aviation missile command material/labor for service of the Apache D Unique components. Since 2001 Boeing has supplied over 1,800 types of D unique components for Apache units. Work on the contract will be performed in Mesa. The company expects to finish work by an estimated completion date of October 31, 2013.  

Boeing enjoys a unique position as the largest aircraft manufacturer in the world in terms of revenues, orders and deliveries, and is also one of the largest aerospace and defense contractors. Besides, its revenues are spread across more than 90 countries around the globe.

Boeing taking into account its performance in the first nine months of 2012, raised its full year 2012 earnings per share guidance to a range of $4.80–$4.95 from its earlier guidance range of $4.40–$4.60. The company also raised its revenue guidance for 2012 to the range of $80.5 billion to $82 billion versus the earlier range of $79.5 billion to $81.5 billion.

The company expects its Commercial Airplanes' 2012 deliveries to come between 585 and 600 airplanes, which are already sold out. This includes an expected 70 to 85 787 and 747-8 deliveries. Commercial Airplanes' 2012 revenue is expected to be between $47.5 billion and $49.5 billion with operating margin around 9.0%.

In the defense space, the company expects defense revenue for 2012 to be between $32.5 billion and $33.0 billion versus its earlier range of $31.5 billion and $32.0 billion with operating margin greater than 9%. Boeing Capital Corporation expects that its aircraft finance portfolio will continue to decline in 2012.

Boeing currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. Considering the fundamentals, we are maintaining our Neutral recommendation on the stock. This is in sync with other aerospace and defense behemoths, General Dynamics Corporation (GD) and Lockheed Martin Corporation (LMT).


 
BOEING CO (BA): Free Stock Analysis Report
 
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LOCKHEED MARTIN (LMT): Free Stock Analysis Report
 
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