June 15, 2011
Boeing (NYSE: BA ) was doubtless disappointed when India booted it from the competition for a $10 billion fighter jet contract last month. But don't lose heart, investors. Boeing's battling back, having scored another small victory Wednesday.
This morning, the company announced a 10-plane deal from the Indian Ministry of Defense for delivery of the C-17 Globemaster III transport aircraft. At roughly $191 million apiece, the contract is worth $1.9 billion to Boeing, eclipsing the value of the six-plane C-130J deal that Lockheed Martin (NYSE: LMT ) inked a few years ago. It bolsters Boeing's place in the Indian arms market, first won when the company and partners Raytheon (NYSE: RTN ) and Northrop Grumman (NYSE: NOC ) landed a $2.1 billion deal to supply India with P-8I subhunting aircraft.
$2 billion here, $2 billion there ...
Granted, these contracts don't yet add up to "real money" for Boeing, which does $64 billion in annual business globally. The company will need to land more (and bigger) contracts if it hopes to make up the shortfall from a retrenching Pentagon.
But that does seem to be the plan, for both Boeing and the Pentagon itself. As U.S. taxpayers rebel at the high cost of defending not just U.S. interests, but subsidizing the security needs of others, we're going to see more and more deals like the one inked in India this week.
Aside from Boeing, who else will benefit? Click here to find out.