Raytheon Company RTN announced that it has won a foreign military sales contract worth $523.4 million from the U.S. Army to upgrade six PATRIOT fire units.
The contract covers foreign military sales to Kuwait. Contracting activity is the Army Contracting Command, Redstone Arsenal, AL.
Work is scheduled to be complete by Mar 28, 2022. The company will perform the work in Jasper, AL; Huntsville, AL; Waltham, MA; Andover, MA; Fremont, CA; Los Osos, CA; Chatsworth, CA; Norway; Italy; Greece; the UK; and Canada.The contract will use fiscal 2010 other procurement funds.
Patriot is a long-range, high-altitude, all-weather system designed to counter threats from tactical ballistic missiles, cruise missiles and advanced fighter aircraft. This missile defense system was successfully used during the 1991 Gulf War and Iraqi War.
Like the U.S. and its allies, other nations across the globe are also utilizing advanced technology to strengthen their defense systems. The Patriot missile defense system has been upgraded continuously in order to keep pace with the changing dynamics of modern warfare.
Raytheon is one of the best-positioned large-cap defense players due to its non-platform-centric focus. The company will continue to gain traction on the back of its strong fundamentals, focus on technological innovation and improvement of its product offering, which will ensure more contract wins and an enhanced growth trajectory.
Raytheon’s bookings in the first quarter of 2016 increased 38.7% to $6.2 billion from $4.5 billion in the year-ago period. The company remains optimistic about its performance in 2016 backed by its robust first-quarterbacklog of $34.77 billion.
Foreign military contracts are a key growth driver forRaytheon. International bookings comprised 26.7% of total first-quarter bookings at the company, while international sales surged 17.1% year over year and represented 42% of its total backlog during the period.
Raytheon currently has a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the same space include TransDigm Group Incorporated TDG, BAE Systems plc BAESY and CAE Inc. CAE. While TransDigm Group and BAE Systems sport a Zacks Rank #1 (Strong Buy), CAE Inc. carries a Zacks Rank #2 (Buy).
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