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Boeing (BA) Wins $487M Apache AH-64 Helicopters Support Deal
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The Boeing Company (BA - Free Report) recently clinched a contract under which it will provide engineering services and technical support for Apache AH-64 aircraft. Work related to the deal is expected to get completed by Feb 6, 2026.
Valued at $487 million, the contract has been awarded by the U.S. Army Contracting Command, Redstone Arsenal, AL.
Importance of Apache Helicopter in the U.S.
Boeing’s AH-64 Apache has emerged as the world’s most advanced, multi-role combat helicopter that is widely used by the U.S. Army, apart from a growing number of international defense forces. With more than 1,200 aircraft in operation accumulating over 1.3 million flight hours in combat, the AH-64 Apache represents the backbone of the U.S. Army attack helicopter fleet.
Notably, AH-64E, the latest version of the AH-64 gunship, which is equipped with new sensors, avionics and improved night operation capabilities, is currently gaining ground in the U.S. combat aerospace.
It is imperative to mention in this context that the fiscal 2022 discretionary budget reflects funding request worth $753 billion for the U.S. defense programs, including an investment option of $825 million for procurement of 30 Apache AH-64E helicopters. No doubt, this reflects solid demand that the Apache family of helicopters enjoys in the U.S. lethal air force space.
How Will the Deal Benefit Boeing?
A rapid increase in terror attacks has compelled nations to strengthen their arsenal and bump up defense budget. With the United States being home to some of the largest manufacturers of combat jets, the nation’s prime defense contractors enjoy a steady flow of contracts from both Pentagon and its foreign allies. With military jets and helicopters constituting a major portion of a nation’s armaments, there is a steady flow of contracts for these weaponries. The latest contract win by Boeing bears a testament to this.
Thanks to the growing demand for Apache AH-64E version, the company won another U.S. Army contract in April 2021, worth $437 million, for full-rate production of Apache AH-64E aircraft.
Such contract inflows tend to push up the company’s military backlog count, thereby bolstering its future revenue growth prospects.
In the second quarter of 2021, Boeing’s defense business unit won key contract awards worth $4 billion, thereby bringing its backlog to a solid $59 billion. Moreover, this segment recorded revenues worth $6.88 billion in the second quarter, reflecting 47% year-over-year improvement.
We believe the latest contract win by Boeing will result in similar solid operating results for its defense business segment in the days ahead.
Looking Ahead
Per a Mordor Intelligence report, the global attack helicopter market is expected to witness CAGR of more than 4% during the 2020-2025 time period. Such growth can be attributed to the rise in global threats, geopolitical instabilities and increased spending on defense. These projections are expected to boost growth of major combat helicopter producers like Boeing, Textron (TXT - Free Report) , Airbus (EADSY - Free Report) and Lockheed Martin (LMT - Free Report) .
Price Movement & Zacks Rank
Boeing’s share price has rallied 19.3% in the past year against the industry’s decline of 8.3%.
Image: Bigstock
Boeing (BA) Wins $487M Apache AH-64 Helicopters Support Deal
The Boeing Company (BA - Free Report) recently clinched a contract under which it will provide engineering services and technical support for Apache AH-64 aircraft. Work related to the deal is expected to get completed by Feb 6, 2026.
Valued at $487 million, the contract has been awarded by the U.S. Army Contracting Command, Redstone Arsenal, AL.
Importance of Apache Helicopter in the U.S.
Boeing’s AH-64 Apache has emerged as the world’s most advanced, multi-role combat helicopter that is widely used by the U.S. Army, apart from a growing number of international defense forces. With more than 1,200 aircraft in operation accumulating over 1.3 million flight hours in combat, the AH-64 Apache represents the backbone of the U.S. Army attack helicopter fleet.
Notably, AH-64E, the latest version of the AH-64 gunship, which is equipped with new sensors, avionics and improved night operation capabilities, is currently gaining ground in the U.S. combat aerospace.
It is imperative to mention in this context that the fiscal 2022 discretionary budget reflects funding request worth $753 billion for the U.S. defense programs, including an investment option of $825 million for procurement of 30 Apache AH-64E helicopters. No doubt, this reflects solid demand that the Apache family of helicopters enjoys in the U.S. lethal air force space.
How Will the Deal Benefit Boeing?
A rapid increase in terror attacks has compelled nations to strengthen their arsenal and bump up defense budget. With the United States being home to some of the largest manufacturers of combat jets, the nation’s prime defense contractors enjoy a steady flow of contracts from both Pentagon and its foreign allies. With military jets and helicopters constituting a major portion of a nation’s armaments, there is a steady flow of contracts for these weaponries. The latest contract win by Boeing bears a testament to this.
Thanks to the growing demand for Apache AH-64E version, the company won another U.S. Army contract in April 2021, worth $437 million, for full-rate production of Apache AH-64E aircraft.
Such contract inflows tend to push up the company’s military backlog count, thereby bolstering its future revenue growth prospects.
In the second quarter of 2021, Boeing’s defense business unit won key contract awards worth $4 billion, thereby bringing its backlog to a solid $59 billion. Moreover, this segment recorded revenues worth $6.88 billion in the second quarter, reflecting 47% year-over-year improvement.
We believe the latest contract win by Boeing will result in similar solid operating results for its defense business segment in the days ahead.
Looking Ahead
Per a Mordor Intelligence report, the global attack helicopter market is expected to witness CAGR of more than 4% during the 2020-2025 time period. Such growth can be attributed to the rise in global threats, geopolitical instabilities and increased spending on defense. These projections are expected to boost growth of major combat helicopter producers like Boeing, Textron (TXT - Free Report) , Airbus (EADSY - Free Report) and Lockheed Martin (LMT - Free Report) .
Price Movement & Zacks Rank
Boeing’s share price has rallied 19.3% in the past year against the industry’s decline of 8.3%.
Image Source: Zacks Investment Research
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.