Troubled airplane maker Boeing (BA) - Get Boeing Company Report has received two contracts worth a combined $2.6 billion to produce air-to-surface and anti-ship missiles for Saudi Arabia and other countries.
The Department of Defense announced that Chicago-based Boeing has been awarded the contracts to both produce and deliver missiles and also modernize so-called Harpoon and Standoff Land Attack Missile Expanded Response, or SLAM ER weapon systems.
The first contract, worth $1.97 billion, is for the modernization of SLAM ER cruise missiles as well as delivery of 650 new missiles "in support of the government of Saudi Arabia," the Pentagon said.
The second, $650 million contract is for delivery of 467 new Harpoon Block II anti-ship missiles, including more than 400 to Saudi Arabia.
The others will be delivered to Brazil, Qatar and Thailand. Support equipment will be supplied to India, Japan, the Netherlands and South Korea, the Pentagon said. The work will be done mostly at the company’s St. Louis and Indianapolis plants.
The contracts are a positive for Boeing, which has suffered dramatic declines in revenue and a surge in costs related to the coronavirus pandemic and plunge in air travel, which has slammed demand for new planes. Ongoing efforts to get its grounded 737 MAX planes back in the air have also hit Boeing’s bottom line.
In its own statement, Boeing said the new contracts would ensure the continuation of the Harpoon program through 2026 and restart its SLAM ER production line. Boeing delivered its last SLAM ER weapon system in 2008.
In addition to making airplanes, Boeing also designs, manufactures, and sells rotorcraft, rockets, satellites, telecommunications equipment, and missiles worldwide.
Shares of Boeing were down 3.88% at $116.79 in trading on Thursday.