Why GE Aerospace Stock Topped the Market Today

Source The Motley Fool

On news of a new contract with a rock-steady arm of the U.S. government, investors loaded up on storied industrial company GE Aerospace (NYSE: GE) stock during Monday's trading session. The company's shares closed the day 2.5% higher, notching a convincing beat over the bellwether S&P 500's (SNPINDEX: ^GSPC) 0.6% increase.

New contract provides plenty of lift

After the market close on Friday, GE Aerospace announced it signed a contract with the U.S. Air Force worth up to $5 billion. This is an indefinite delivery/indefinite quality agreement for the global supply of the company's F110-GE-129 engines that power the F-15 and F-16 aircraft used by numerous American allies throughout the world.

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In the press release touting the latest deal for the engine, GE Aerospace didn't hesitate to point out that the F110 has logged over 11 million flight hours in total. It has also been in production for more than 40 years, and according to its maker, produces the most thrust in its class.

The company quoted its CEO of defense and systems Amy Gowder as saying that the new contract ensures that the sturdy product "remains the engine of choice for the world's F-15 and F-16 fleets."

"This contract underscores the enduring trust in the F110's performance, reliability, and value for our customers and their critical missions," Gowder added.

A steady business

As a go-to provider of engines for those two long-standing fighter models, it wasn't all that surprising that GE Aerospace won the Air Force's latest contract to supply them. All the same, it's reassuring that this business will continue to produce revenue for the company; it's doing well continuing to service this need.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends GE Aerospace. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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