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SAN DIEGO - Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) and GE Aerospace (NYSE: GE) have formalized a teaming agreement to develop propulsion technologies for unmanned aerial systems and Collaborative Combat Aircraft-type (CCA-type) platforms. This partnership aims to produce affordable, high-performance engines tailored to the United States’ national security needs.
The agreement builds on a previous Memorandum of Understanding, expanding the collaboration to include the development, manufacturing, testing, and deployment of the GEK800 Engine. Additionally, work has commenced on another new engine, the GEK1500. These engines are designed to support a range of unmanned systems and similar defense applications, potentially providing mass propulsion solutions for the Department of Defense.
Kratos brings over two decades of experience in creating small, cost-effective engines for unmanned aerial systems (UAS), drones, and missiles. GE Aerospace complements this with a century’s worth of propulsion technology expertise and the capacity to scale advanced designs for high-rate production.
Eric DeMarco, President and CEO of Kratos, emphasized the strategic importance of the teaming agreement with GE Aerospace, stating that affordability and rapid capability delivery are key contributions of their partnership. Amy Gowder, President and CEO of Defense & Systems at GE Aerospace, expressed excitement about accelerating development across various classes of unmanned systems through this collaboration.
The two companies are positioning themselves to offer propulsion solutions that align with the future force’s requirements, combining Kratos’ approach to cost reduction and quick market entry with GE Aerospace’s production capabilities.
This announcement is based on a press release statement, which outlines the companies’ intent to pursue opportunities as prime or lead contractors, or to partner with large system integrators, depending on their assessment of the probability of win and investment requirements.
Investors may note that the partnership could enhance Kratos and GE Aerospace’s competitive positioning in the defense market by leveraging their combined expertise in affordable propulsion technology for next-generation defense applications. With GE trading near its 52-week high and currently valued at a premium according to InvestingPro’s Fair Value analysis, investors seeking deeper insights can access comprehensive valuation metrics, 12+ additional ProTips, and detailed financial analysis through InvestingPro’s exclusive research reports.
In other recent news, Qatar Airways announced a 28% increase in its annual net profit, reaching a record 7.8 billion Qatari riyals ($2.1 billion). The airline also confirmed a significant order for 160 Boeing 777X and 787 planes equipped with GE Aerospace engines, marking the largest widebody deal ever between the companies. This deal is part of a broader $96 billion agreement involving the purchase of Boeing aircraft, contributing to multiple commercial agreements between the U.S. and Qatar valued at over $243 billion. GE Aerospace, meanwhile, has been in the spotlight as Jefferies raised its price target for the company to $260, maintaining a Buy rating. BofA Securities also increased its price target for GE Aerospace to $230, citing the company’s effective market strategies and resilience. Additionally, GE Aerospace and Qatar Airways expanded their partnership with the purchase of over 400 engines, including the GE9X and GEnx units. These developments highlight the ongoing collaboration between GE Aerospace and Qatar Airways, further supported by the U.S.-Qatar agreements that span various sectors, including aviation and defense.
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