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Textron (TXT) Unit Wins Deal to Support T-6C Aircraft Program

·4-min read

Textron Inc.’s TXT business segment, Textron Aviation recently clinched a contract involving the T-6C aircraft. The award has been offered by the Air Force Life Cycle Management Center, Legacy Training Aircraft Division, International Branch, Wright-Patterson Air Force Base, OH.

Details of the Deal

Valued at $43.8 million, the contract is expected to get completed by Sep 30, 2024. Per the terms of the deal, Textron will supply three T-6C aircraft along with providing ground support equipment, two spare engines, spare parts, personal life support equipment, external fuel tanks and pylons as well as an aircraft ferry.

The company will also offer support for site surveys for these jets. Work related to this contract will be executed in Wichita, KS,

A Brief Note on T-6C Aircraft

Textron’s Beechcraft T-6C Texan II military training aircraft is a next-generation military trainer, which prepares pilots for real-world missions. Each training capability is designed for military aircraft mission experience, providing pilots with the expertise and confidence to achieve success.

The latest T-6C Texan II flight deck features include primary flight display, navigation, engine-indicating and crew-alerting systems as well as programmable mission functions. It also comprises a backup, all-in-one flight instrument that combines all essential flight cues in one easy-to-read display.

Growth Prospects

With rising security threats across the globe, emerging economies like the Asia Pacific, the Middle East and South America are spending a lot on enhancing their defense arsenals. Meanwhile, developed nations like the United States and Europe have already been leading the defense market. With the United States being the largest weapons exporter worldwide, the nation has been spending amply on defense products, wherein the combat aircraft enjoys a leading position. Boeing, being the largest aircraft manufacturer in the United States, thus enjoys a dominant position in the combat aircraft market.

Per a Mordor Intelligence report, the global combat aircraft market is expected to witness a CAGR of 2.5% during the 2021-2026 time period, with North America constituting the largest share of this market. Such growth can be attributed to a rise in global threats and geopolitical instabilities, and increased spending on defense. These projections should benefit Textron along with other U.S.-based combat jet manufacturers like Northrop Grumman NOC, Lockheed Martin LMT and Boeing BA.

Lockheed’s Aeronautics business segment is engaged in the research, design, development, manufacture, integration, sustainment, support and upgrade of advanced military aircraft, including combat and air mobility aircraft, unmanned air vehicles and related technologies. Its major programs include F-35, C-130 Hercules, F-16 Fighting Falcon and F-22 Raptor jets.

Lockheed Martin’s second-quarter 2022 earnings surpassed the Zacks Consensus Estimate of $6.29 by 0.5%. The company delivered a four-quarter average earnings surprise of 64.46%.

Since its inception, Northrop Grumman has been a pioneer in the development of manned aircraft for combat. Northrop Grumman also has a tradition of providing technological leadership in all aspects of military aviation and aircraft, such as manned, unmanned, targeting, surveillance, and aircraft self-protection systems that enable warfighters to accomplish missions anytime, anywhere and under any conditions.

Northrop Grumman’s second-quarter 2022 earnings surpassed the Zacks Consensus Estimate of $6.03 by 0.5%. The company has a four-quarter average earnings surprise of 3.92%.

Boeing Defense, Space & Security segment’s primary products include fixed-wing military aircraft, F/A-18E/F Super Hornet, F-15 programs, P-8 programs, KC-46A Tanker, and T-7A Red Hawk. This segment also produces rotorcraft and rotary-wing programs such as CH-47 Chinook, AH-64 Apache and V-22 Osprey.

Boeing boasts a long-term earnings growth rate of 4%. The company views a $2.6 trillion market opportunity for its defense and space unit, during the next decade.

Price Movement

In the past year, shares of Textron have lost 2.7% compared with the industry’s 29.1% decline.

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Zacks Rank

Textron currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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