The Boeing Co. BA received approval from the U.S. Government to sell up to nine P-8A Poseidon maritime surveillance aircraft to the UK. The total value of the transaction may be up to $3.2 billion.
This deal is part of Britain’s five-year plan, announced in Nov 2015, to increase spending by $16.96 billion to $251.60 billion over the next decade.
U.S. Congress has been notified about the potential sale by the Pentagon's Defense Security Cooperation Agency (“DSCA”), which supervises foreign arms sales. Though Congress has 15 days to cancel the sale, it is expected that such an action will not be taken as the two countries have been the closest of allies for a long time.
This deal is vital for Britain as these jets will improve its potential to provide national defense, and contribute to The North Atlantic Treaty Organization, or NATO, and coalition operations.
Britain has maintained its core skills in maritime patrol and reconnaissance through personnel exchange programs after it retired the Nimrod aircraft. Thus, UK forces were left to work on the U.S. Navy P-8A aircraft.
Apart from Boeing, the DSCA has also named ViaSat, Rockwell Collins COL, Spirit AeroSystems SPR, Raytheon Company RTN, Northrop Grumman, Exelis, Arnprior Aerospace, General Electric and Martin Baker among others as other contractors on the project.
Boeing’s P-8A Multi-mission Maritime aircraft, also known as the Poseidon, is a long-range anti-submarine warfare, anti-surface warfare, intelligence, surveillance and reconnaissance (“ISR”) fighter jet developed specifically for the U.S. Navy. It is capable of executing broad-area maritime and littoral operations.
Boeing is one of the major players in the defense business. Boeing’s defense business stands out among its peers by virtue of its broadly diversified programs, strong order bookings and order backlog. Internationally, the company is witnessing strong demand for its defense products, such as fighter jets, the rotorcraft line-up and 737-based military derivatives. In 2015, non-U.S. customers accounted for approximately 59% of Boeing’s revenues. International demand remains strong, accounting for 40% of the fourth quarter defense backlog and 33% of its quarterly revenues.
Zacks Rank
General Dynamics currently has a Zacks Rank #3 (Hold).
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 >>
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
Be the first to comment