Integrated Defense Systems (“IDS”), of Raytheon Company (RTN) has received a contract worth $45.3 million to supply MK 54 lightweight torpedo hardware (“LHT”), test equipment, spares and related engineering and repair services. The task will be performed for U.S. Navy for its fleet inventory and for the Royal Australian Navy and the Indian Navy in support of foreign military sales.
The Mark 54 LHT is a standard 12.75 inch antisubmarine warfare (“ASW”) torpedo used by the United States Navy. It is the next-generation anti-submarine warfare weapon and is set up from surface ships, helicopters and fixed-wing aircrafts. It consists of sophisticated processing algorithms that allow it to analyze the information, edit false targets or countermeasure and detect and attack underwater targets.
MK 54 is the primary weapon for the MH-60R maritime helicopter’s ASW mission. Well designed for both deep water and littoral environments, MK 54 is the only lightweight torpedo that has the potential to strike any underwater target in the world's oceans, regardless of water depth.
In collaboration with the U.S. Navy, the company works to meet the lightweight torpedo requirements of the U.S. and its allied fleets. With an established infrastructure and experienced workforce co-located with the Naval Undersea Warfare Center, Keyport, Washington, the company continues to advance the development of the world's most effective lightweight torpedo, delivering its proven capabilities to meet the anti-submarine warfare needs of the U.S. and its allied fleets.
IDS segment provides integrated air and missile defense and naval and maritime war-fighting solutions. The segment mainly caters to the U.S. Navy, Army, Air Force and Marine Corps, and the Department of Homeland Security ("DHS"). Recently, the segment had received a $125.3 million contract from The Missile Defense Agency (“MDA”) and the U.S. Air Force. As per the contract, the company will be involved in the modernization and addition of a new competence power to an Air Force early warning radar (“EWR”) system.
Defense spending is the major source of revenue for the aerospace and defense companies, with the US accounting for more than 40% of total global defense spending. Recently, Raytheon received a $349 million five-year, multi-year contract to provide heavy anti-tank, wireless precision-assault missiles to the U.S. government. Under this contract, Raytheon will deliver 6,676 of the new wireless tube-launched, optically tracked, wireless-guided (“TOW”) missiles that receive commands from the gunner through a wireless guidance link, eliminating the need of wire connection as seen in the previous generations of the missile.
Based in Massachusetts, Raytheon Company is one of the largest aerospace and defense companies in the U.S., with a diversified line of military products, including missiles, radars, sensors, surveillance and reconnaissance equipment, communication and information systems, naval systems, air traffic control systems, and technical services.
Looking forward, the company enjoys an improving balance sheet, growing cash flow, and operational improvements. Future growth will be driven by its focus on ISR unmanned systems, training, cyber security, Standard Missile-6, Patriot, Zumwalt and THAAD.
However, this is offset by apprehensions over the future growth of the U.S. defense budget, the fate of high-cost programs, risks related to key project executions and order cancellations. Raytheon presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.
The company mainly competes with L-3 Communications Holdings Inc. (LLL) and Espey Mfg. & Electronics Corp. (ESP).
L-3 COMM HLDGS (LLL): Free Stock Analysis Report
RAYTHEON CO (RTN): Free Stock Analysis Report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment