Boeing Co. views the low-ball bids that helped it win contracts for a Navy drone and an Air Force training jet as spending money to make money.

While the Chicago-based planemaker wrote down third-quarter profits in its defense unit by $691 million to cover costs on initial work for the MQ-25, an unmanned refueling tanker that can take off and land on an aircraft carrier, and the T-X trainer for Air Force fighter pilots, Chief Executive Officer Dennis Muilenburg says the two programs offer a potential $60 billion long-term revenue stream.

"This is a targeted and very deliberate strategy focused on some key defense franchises that we believe have life-cycles that are measured in decades," he told investors last week. "We still see our defense business as a modest growth business. It’s healthy, and the recent wins are going to make it even more healthy."

Indeed, landing contracts for military aircraft likely to be in use for much of the century revitalizes a Boeing business that had relied heavily on production of older models after losing the lucrative F-35 fighter to Lockheed Martin and the B-21 long-range bomber to Northrop Grumman.

The planemaker's F/A-18 Super Hornet and the EA-18 Growler derivative "make up the bulk of the Navy's carrier air wing" currently, but Lockheed is encroaching with the F-35 joint strike fighter, the most expensive weapons program in U.S. history, said Roman Schweizer, an analyst with Cowen Washington Research Group.

"While we would not support running an entire business like this -- losing money in near/mid-term with possibility of profit in the long term -- given the economics of these specific deals, we can see how management believes these 'investments' make sense," Myles Walton, an analyst with the Swiss lender UBS, said in a report.

The multi-million dollar charges aren't cash payouts, but an assessment of the likely costs and revenue over the first contracts for the two programs, Boeing said. The Navy's MQ-25 order covers just four aircraft, expected to be delivered in 2024, while the T-X deal includes 351 planes that represent less than 20 percent of the total production run.

Boeing worked with Swedish partner Saab to build two prototype aircraft for the latter program, which completed more than 71 test flights as of the end of September. An MQ-25 drone is undergoing ground tests and should fly within the next year, the company said.

Ultimately, "the planemaker invested up front with a business case that is very strong, and the return to our shareholders as a result is going to be very strong," Muilenburg said.

The costs nonetheless dampened investor enthusiasm for the two projects, given the potential for execution issues to shrink profit margins, as happened with KC-46 refueling tanker, said Rajeev Lalwani, an analyst with the New York investment bank Morgan Stanley.

The contract Boeing won for that plane, based on its twin-aisle 767 jetliner, set a ceiling price of $4.9 billion to develop the first four aircraft; the plane was still on the drawing board when Boeing landed the award in 2011, and it has already missed an initial August 2017 delivery deadline.

A $146 million charge on the refueling tanker in the three months through September, combined with the charges on the new projects, indicates growth in the defense business "may come at the price of margins and cash," said Noah Poponak, an analyst with New York-based Goldman Sachs.