Boeing to Air Force: Keep Yer Stinkin' Tankers

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I know the market's all abuzz lately over rumors that Boeing (NYSE: BA  ) may pull its bid to build flying gas stations for the Air Force. And yes, the Pentagon's revised invitation for bids is due out any minute now. No matter. The big news right now, at least, is that Boeing has just landed a $4.3 billion contract to build 191 Chinook helicopters for the Army.

That's great news for Boeing, and for the multiple contractors who help it power (Honeywell (NYSE: HON  ) ), navigate (Rockwell Collins (NYSE: COL  ) ), and arm (General Electric (NYSE: GE  ) ) the Chinook. This contract could yield as much as $4.8 billion in total for Boeing and its partners, if the Army exercises its option to order an additional two dozen whirlybirds over the course of the contract's five-year lifespan.

So what? Boeing wins multibillion-dollar contracts all the time!
True, and that's actually my point. After the initial exuberance over its winning argument at the GAO, Boeing's share price has slipped in anticipation that it will follow through on its threat to pull out of the KC-X Tanker competition -- and lose as much in $100 billion in revenue that will flow to the winner.

On the one hand, a well-played bluff could work to Boeing's advantage. (It has before.) Word has it that the Air Force prefers a big bird hauling its petrol, which could favor Northrop Grumman's (NYSE: NOC  ) offering. But if Boeing can finagle some extra months to rework its proposal, it might be able to substitute a Boeing 777 variant for its existing 767-based bid.

But to my mind, focusing too intently on KC-X risks missing the forest for the trees. Sure, it would be nice to see Boeing win. But it's not like that's the only arrow in Boeing's quiver. On the civilian side, there's still the 787 Dreamliner; once its kinks get worked out, the 787 should yield tens of billions in revenue for Boeing for decades to come. And as today's Chinook contract shows, Boeing has plenty of defense work to keep it busy, even if it withdraws from -- or loses -- the KC-X competition.

Foolish takeaway
In the world of defense contracting, you win some (contracts), and you lose some. Meanwhile, investors can take heart that with a price-to-free cash flow ratio of less than 9, and growth estimated to average 12% per year over the long-term, Boeing's chance of becoming a winning investment looks bright indeed -- KC-X or no.

Further Foolishness is your best defense:

Fool contributor Rich Smith owns shares of Boeing. The Motley Fool has a disclosure policy.

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