The Boeing Company (BA) Fuels Up for the Long Run

The tanker could earn Boeing international sales as well if it passes all its tests. Singapore has reportedly looked into the craft as a future solution to its tanker needs, and Boeing deputy KC-46 program manager Jake Howitt has said the company could earn between 25 and 50 foreign sales of KC-46 planes in the aircraft’s future, increasing deliveries by up to nearly 28% over the U.S. planned total.

The KC-46 won’t take over The Boeing Company (NYSE:BA)’s defense division by itself — not when the segment already earned more than $32.6 billion last year. However, the Air Force’s need and the KC-46’s strong developmental showing so far anchor the program as a foundation of the future and safeguard this stock against budget cut-related hits, should the KC-46 successfully progress to production and delivery. Also, the craft is another hit against Boeing’s chief rival, EADS, which lost out to Boeing on the next-generation tanker bid in 2011. While Boeing’s low bid may mean that the first deliveries of KC-46s make little money, EADS’ American rival is set to win out in the long term.

Boeing will have to deal with much more than just the KC-46 over the coming years. The company’s passenger aircraft segment still makes up the bulk of its sales. Even in its defense business, Boeing will have to continue growing its backlog of existing craft while developing the KC-46 into a top moneymaker. Still, if this tanker takes off, it could be just what Boeing’s stock needs to thrive in the slimmed-down future of the defense industry.

The article Boeing Stock Fuels Up for the Long Run originally appeared on Fool.com and is written by Dan Carroll.

Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool owns shares of Lockheed Martin.

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