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Bell Textron awarded $1.3B U.S. Army contract for new assault helicopter

Textron (NYSE:TXT) +7.1% post-market Monday after the U.S. Army selected Bell Textron to build the Future Long-Range Assault Aircraft in a contract worth up to $1.3B.

The company beat out a Lockheed Martin (LMT) and Boeing (BA) team for the contract, which Army officials said eventually could rise to $7B if all options are exercised.

The stakes were high for Textron's (TXT) Bell division, which has been seeking to offset falling sales for its V-22 Osprey; without the contract, Bell Military revenue might have declined from $1.8B this year to $800M by 2026, according to Jefferies analyst Sheila Kahyaoglu.

The contract is one part of the Army's Future Vertical Lift program to replace aging Black Hawk and Apache helicopters by 2030.

Textron (TXT) said the initial contract refines the weapon system design, sustainment, digital enterprise, manufacturing, systems integration, flight-testing and airworthiness qualification.

The Army said the new machine will "provide transformational increases in speed, range, payload and endurance to replace a portion of the Army's current assault and utility aircraft fleet."

Textron (TXT) is one of several companies said to be vying to buy Aerojet Rocketdyne.