Boeing Teams with Raytheon - Analyst Blog

Boeing Company (BA) has joined a team led by Raytheon Company (RTN) to develop U.S. Air Force's new ground control segment. Raytheon got the Global Positioning System (GPS) advanced control segment program (OCX) contract from the Air Force Space and Missile Systems Center’s GPS Wing. Boeing estimates the value of the contract to exceed $880 million spread over six years, including five option years for sustenance.
 
Boeing has provided ground operations sustenance support for the current GPS II fleet for nearly a decade. Under GPS OCX, the company will provide infrastructure, development of the ground systems, and continued operational and sustenance support for the current and future GPS satellite systems. The company will install hardware and software at GPS control stations at the Schriever Air Force Base in Colorado and the Vandenberg Air Force Base in California.
 
A prime contractor for GPS satellites for more than three decades, Boeing is currently under contract to build 12 GPS Block IIF satellites. GPS IIF will form the core of the GPS constellation for many years to come.
 
Headquartered in Chicago, Boeing is the world’s largest manufacturer of commercial jet liners and military aerospace products (based on total sales). Boeing designs and produces commercial airplanes, defense systems, and civil and defense space systems.
 
Boeing is also the largest NASA contractor. Non-airplane products include helicopters, electronic and defense systems, missiles, satellites, rocket engines, launch vehicles, and advanced information and communication systems.
 
Boeing is one of the best-positioned companies among its defense peers by virtue of its balanced exposure to commercial aircraft and defense equipment. Defense peers like Lockheed Martin Corporation (LMT) and Northrop Grumman Corporation (NOC) dabble only in defense equipment.
 
Going forward, we believe a $316 billion order backlog, strong order booking, and a globally diversified customer base will help maintain Boeing’s growth momentum.
 
However, the momentum could meet headwinds from a bearish commercial aerospace market, fears over growth in defense spending and delays in the launch of 787. Thus we are Neutral on the stock at this point in time.

Read the full analyst report on "BA"
Read the full analyst report on "RTN"
Read the full analyst report on "LMT"
Read the full analyst report on "NOC"
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