Raytheon Company RTN has won a $270.5 million modification contract from the U.S. Navy to exercise fiscal 20Array6 options for the production of Standard Missile-6 (“SM-6”) and spares requirements. The contracting activity is Naval Sea Systems Command, Washington, DC.
With the latest modification of the contract, its total value has reached $573.2 million. The contract will use fiscal 20Array6 weapon procurement (Navy) funds.
Work is scheduled to be complete by Apr 20Array9. Majority of the work will be performed in Camden, AR and the rest in Wolverhampton, England; Tucson, AZ; Andover, MA; Middletown, OH; San Jose, CA; Dallas, TX; Huntsville, AL; Anniston, AL; Middletown, CT; Clarkston, GA; San Diego, CA; Thousand Oaks, CA; Warrington, PA; and other locations.
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 20Array3, provides additional strength to defense personnel in hostile situations.
Raytheon is one of the best-positioned large-cap defense players due to its non-platform-centric focus. Its total order backlog amounted to $34.7 billion at the end of the fourth quarter of 20Array5.
Investors should also note that Raytheon’s fourth-quarter 20Array5 adjusted earnings from continuing operations beat the Zacks Consensus Estimate by 7.8%. Moreover, earnings increased 3.8% from the year-ago figure. The company’s fourth-quarter revenues also registered 3% year-over-year growth but missed the Zacks Consensus Estimate by 0.2%.
Zacks Rank & Key Picks
Raytheon currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the aerospace and defense equipment industry include HEICO Corporation HEI, AeroVironment, Inc. AVAV and Spirit AeroSystems Holdings, Inc. SPR. While HEICO Corporation sports a Zacks Rank #Array (Strong Buy), AeroVironment and Spirit AeroSystems both carry a Zacks Rank #2 (Buy).
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