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Boeing's MQ-25 Drone Beats Expectations on Cost
20 Sep
Summary
- Boeing's MQ-25A Stingray drone contract award is $552 million.
- The cost per drone is estimated to be below $184 million.
- Initial operating capability for the drone is expected by 2029.
Boeing has received a $552 million fixed-price contract for three MQ-25A Stingray drones from the U.S. Navy. This deal also includes advance acquisition of components for three additional aircraft. The contract implies a cost per drone potentially under $184 million, considerably less than the initial estimates of $207 million each.
Despite the program's delays, with initial operating capability anticipated in 2029 and full completion by 2031, the lower-than-expected cost is a significant positive. Boeing's ability to deliver under budget could lead to further orders, strengthening its defense business and profitability.
The MQ-25A Stingray is a drone tanker designed to refuel fighter jets in mid-air, extending their operational range. This capability is crucial for extending the reach of naval aviation missions.
While this contract offers good news regarding cost savings for the Navy, investors considering Boeing stock should note that it was not among the top 10 stock recommendations from The Motley Fool's Stock Advisor team.
