Aerospace and defense operator Raytheon Company RTN received a $149 million contract from the U.S. Navy to supply 74 Standard Missile-6 (“SM-6”) all up rounds, spares, containers and services.
The current contract is an add-on to nearly $110 million awarded to Raytheon in the first quarter of 2015, taking the full-rate production contract to $259 million. If future contract modifications are exercised, it would enhance the cumulative value of this contract to nearly $563 million. Raytheon will assemble these SM-6 missiles at its Redstone Arsenal in Huntsville, AL.
SM-6 is a surface-to-air supersonic missile capable of successfully engaging manned and unmanned aerial vehicles and fixed- and rotary-wing aircraft. It also defends against land-attack and anti-ship cruise missiles in flight. This missile, deployed in 2013, provides additional strength to defense personnel in hostile situations.
Raytheon has already delivered more than 160 SM-6 missiles to the U.S. Navy. Due to the missile’s unique ability to neutralize threats, combatant commanders want as many of these interceptors as possible on their deployed ships.
Raytheon’s advanced Missile Systems division enables it to win consistent orders from the U.S. as well as international customers. Like the U.S. and its allies, other nations across the globe are also utilizing advanced technology to strengthen their defense systems. New bookings in the first quarter of 2015 were $4.47 billion compared with $4.29 billion in the year-ago period, reflecting 4.1% growth.
In Apr 2015, Raytheon received a $2 billion contract from an undisclosed foreign buyer for Patriot missile defense systems. This took its total international orders for the air-defense system to $5 billion since last December (read: Raytheon Seals $2B Patriot Missile-Defense Systems Contract).
Raytheon currently has a Zacks Rank #2 (Buy). Other well-ranked players in the industry include Zacks Ranked #1 (Strong Buy) Orbital ATK Inc. OA and TransDigm Group Incorporated TDG as well as Zacks Ranked #2 (Buy) Rockwell Collins Inc. COL.
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