Raytheon Company (RTN) successfully completed the preliminary design review for the Global Positioning System Next Generation Operational Control System (“GPS OCX”). In the process, the assessment of the architectural and technical maturity of the program design was done by the U.S. Air Force Space and Missile Systems Center's (“SMC”) GPS Directorate.
The review assessed and endorsed the program's development approach, cost estimates and delivery schedule. It validates the design and confirms the company’s proven capabilities and commitment to deliver GPS OCX Block 1 on time and on budget. The successful review proves that the program's design maturity meets the MIL-STD-1521B standard and will allow the team to proceed with the completion of the next phase of development in preparation for the GPS III launch in 2014.
GPS OCX is the next generation operational gateway service that is designed to provide secure, accurate and reliable navigation and timing information to effectively support military, commercial and civil users. The OCX segment updates GPS command and control (“C2”) and mission management capabilities, transforming the focus of GPS operations from satellite C2, to user-oriented, effects-based operations.
Besides acting as the service integrator between ground, space and user segments to enhance mission command and control, and situational awareness capabilities, GPS OCX will facilitate additional civil signals (L1C, L2C and L5) and new signal structures (“M-Code”) to provide navigation integrity, improved accuracy and increased availability.
Raytheon is one of the best-positioned companies among the large-cap defense players due to its non-platform-centric focus, as well as its strong order bookings and order backlog. Looking forward, the company enjoys an improving balance sheet, growing cash flow, and operational improvements.
This is, however, offset by apprehensions over future growth of the U.S. defense budget, the fate of high-cost programs, risks related to key project executions and order cancellations. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.
Headquartered in Waltham, Mass., Raytheon Company is a technology and innovation leader specializing in defense, homeland security and other government markets throughout the world. The company provides state-of-the-art electronics, mission systems integration and other capabilities in the areas of sensing; effects; and command, control, communications and intelligence systems, as well as a broad range of mission support services. Some of its main competitors are Northrop Grumman Corporation (NOC) and Lockheed Martin Corporation (LMT).
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