The Boeing Co.’s BA business unit, Defense, Space & Security, has won a modification contract from the U.S. Air Force to upgrade F-15 Combined APG-63 Version 3 Radar Improvement Program Version 3 and APG-82 Version 1 Radar Modernization Program (RMP) radar.
The contract is valued at $558.5 million. It was awarded by the Air Force Life Cycle Management Center, Wright-Patterson Air Force Base, OH.
Per the contract, Boeing will procure, install, supply initial spares and provide support for 42 Version 3, and 29 RMP radars.
Work is scheduled to be complete by Jan 15, 2019. The company will execute the work in St. Louis, MI. The contract will use fiscal 2015 and 2016 procurement funds.
What’s APG-63 and APG-82?
APG-63 is an all-weather multimode radar system designed by Raytheon Company RTN for the F-15E air superiority fighter. It boasts multi-role capability, long-term support, and future growth options. The APG-63 Version 3 radar offers powerful, adaptable radar technology, with established performance and strategic flexibility. This innovative, highly reliable technology is compatible with the F-15C and F-15E aircraft.
The APG-82 Version 1 optimize the F-15E’s multirole mission capability. It includes extended-range, superior multi-target tracking and precision engagement potential. This version also provides enhancement of system reliability over the legacy F-15E APG-70 radar. This unique level of reliability and maintainability will help the Air Force generate cost savings.
Boeing is the manufacturer of the F-15. The company has received several contracts from the Pentagon in the past to install the APG-63 Version 3 radar on its F-15C/D jet fighters and APG-82 radar systems on its F-15E fighter-bombers. With the installation of these radar systems, high-resolution ground-mapping data has been enabled in the F-15, which helps crews identify targets at great distances and increases situational awareness, lethality and survivability.
The company witnesses a steady flow of contracts from the Pentagon and other international customers. It is one of the major players in the defense business. Its defense business stands out among its peers by virtue of its broadly diversified programs, strong order bookings and solid backlog.
Boeing’s stock has improved about 2.45% in the last one year, underperforming the Zacks Categorized Aerospace/Defense industry’s gain of 10.82% over the same time frame. This could be because Boeing continues to face challenges from the uncertainties related to high-cost programs, risks related to key project executions, order cancellations as well as stiff competition.
Zacks Rank & Key Picks
Boeing currently has a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the aerospace and defense space include Engility Holdings, Inc. EGL and Leidos Holdings, Inc. LDOS.
On an average, Engility delivered a positive earnings surprise of 23.19% in the trailing four quarters. The company’s 2016 estimate has increased 13.4% over the last 30 days. Engility sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Leidos Holdings carries a Zacks Rank #2 (Buy). The company’s 2016 estimate has increased by 10.6% over the last 30 days. On an average, the company delivered a positive earnings surprise of 12.20% in the trailing four quarters.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.