Raytheon (RTN) Secures U.S. Navy Contract Worth $109.6M

April 2, 2015


Raytheon Company (RTNAnalyst Report) won a contract worth $109.6 million from the U.S. Navy. Per the contract, the company will procure long-lead materials for the production of Standard Missile-6 (“SM-6”) and the maintenance of Standard Missile-2 (“SM-2”).

SM-6 is a surface-to-air supersonic missile, which can be operated in both active and semi-active modes. It provides the warfighter with the enhanced capability to detect targets beyond the line of sight. It is also capable of shielding against any land-attack or anti-ship cruise missile in flight. Todate, Raytheon has supplied over 160 missiles.

SM-2 is a fleet-area air defense weapon system, which has the capability to provide extended-area air defense protection. To date, Raytheon has delivered over 5000 SM-2s to the U.S. and its allies. Its international customers include Australia, Canada, Germany, Japan and Korea among others.

Lately, Raytheon has won several big-ticket contracts. The defense major nabbed a $700 million service and product contract for several U.S. missile defense facilities. The contract entails sustainment services and products supporting the Integrated Tactical Warning/Attack Assessment (“ITW/AA”) and Space Support Contract covered systems. ITW/AA is the worldwide missile warning and surveillance system with air-, land- and space-based systems. The program is expected to be completed by 2020.

The company also won a fixed-price incentive firm modification contract worth $528.8 million, under which it may exercise the option to supply Advanced Medium Range Air to Air Missile (“AMRAAM”) to the U.S. Air Force (read more:Raytheon Co. Wins $528.8M AMRAAM Modification Contract).

Raytheon also secured a $769.4 million direct commercial sale contract to upgrade a number of Patriot Air and Missile Defense Systems for the Republic of Korea. Patriot is a long-range, high-altitude, all-weather system developed to counter threats from tactical ballistic missiles, cruise missiles and advanced fighter aircraft. Raytheon will deliver three upgrades to Korea’s current Patriot system that includes open architecture, a modern man-station interface and radar digital processors.

With a growing order book, it can only be expected that the company’s strong fundamentals, focus on technological innovation and improvement of its product offering will ensure more contract wins and an enhanced growth trajectory, going forward…

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