Boeing Co. (BA) booked a $704.4 million U.S. Army contract to build 21 new and 14 remanufactured CH-47F Chinook helicopters. Earlier, the British Ministry of Defense said it will buy 22 new Chinook helicopters to supplement its operations in Afghanistan.

These apart, two more Chinook deals are pending clearance from the U.S. Congress. The United Arab Emirates and Turkey have asked for 16 and 14 Chinook’s respectively. The deals are tentatively priced at $2 billion and $1.2 billion, respectively.

Built at the Boeing Rotorcraft Systems facility in Ridley Township, the CH-47F helicopter features a newly designed, modernized airframe, with Common Avionics Architecture System cockpit from Rockwell Collins Inc. (COL). The helicopters are powered by two 4,733-horsepower Honeywell engines built by Honeywell International Inc. (HON).

The Chinook rush will boost the Integrated Defense Systems segmental order backlog. Integrated Defense Systems order backlog, decreased from $70 billion at the end of the first half of fiscal 2009 to $65.8 billion at the end of the recent quarter. The reduction in backlog was primarily due to the termination of the manned ground vehicle section of the Future Combat Systems contract.

Headquartered in Chicago, Boeing is the world’s largest manufacturer of commercial jet liners and military aerospace products (based on total sales). Boeing designs and produces commercial airplanes, defense systems, and civil and defense space systems. It is also the largest NASA contractor. Non-airplane products include helicopters, electronic and defense systems, missiles, satellites, rocket engines, launch vehicles, and advanced information and communication systems.

We maintain our market Neutral recommendation on the shares.

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