Boeing Secures $20 Billion Pentagon Contract for F/A-XX Fighter Jet

Aircraft manufacturer Boeing rose in premarket trading Wednesday after securing a deal with the U.S. Pentagon and U.S. Navy to develop the next generation of fighter jets.

The contract, worth more than $20 billion, is to build its Sixth-Generation F/A-XX Strike Fighter over a long-term phase, the defense departments said. The F/A-XX is intended to replace the service's fleet of F/A-18 Super Hornets.

The fighter will advance open mission systems architecture, advanced mission systems, and operational reach and capacity, Boeing said in a separate statement. Boeing was last up 2.7% in premarket trading.

Shares of Northrop Grumman Corporation, a top U.S. aerospace and defense contractor and a Boeing competitor, were down 3.6% in premarket. Boeing repeatedly beat Northrop for the government deal.

"The F/A-XX is a critical pillar in our commitment to maintaining peace through strength. F/A-XX will dominate contested airspace, extend operational reach, and deliver a decisive combat advantage for the warfighter," said Michael P. Duffey, Under Secretary of War for acquisition and sustainment.

It marks the company's second prestigious sixth-generation jet contract in a year after the Air Force selected it to develop its F-47 fighter in 2025.

Elsewhere, Boeing recently flagged a software glitch in some of its 737 Max 10 aircraft that could impact certain landing procedures, which led the Federal Aviation Administration on Monday to delay its certification of the aircraft.

"We haven't concluded whether this is a safety-of-flight issue or not, but we will be delaying the 10 ... until we're satisfied that we don't have an issue here," FAA Administrator Bryan Bedford said at a press conference on air traffic modernization in Washington, D.C., on Monday.