Raytheon Company’s (RTN) wholly owned subsidiary BBN Technologies (BBN) has received a $9 million order to deliver additional Boomerang shooter detection system components to the U.S. Army. Per the contract BBN will deliver spare parts for Boomerang III systems, such as easily field-replaceable microphones.
BBN Technologies was set up in 1984 by Massachusetts Institute of Technology professors Richard Bolt and Leo Beranek with MIT graduate Robert Newman. The company was acquired by Raytheon in 2009 to augment its Intelligence and Information Systems segment, whose importance rose in recent times with Pentagon’s emphasis on cyber security and mission-critical intelligence products.
Raytheon is one of the best-positioned companies among the large-cap defense players because of its non-platform-centric focus. Looking forward, the company enjoys strong order bookings and order backlog, an improving balance sheet, growing cash flow, and operational improvements. Future growth is expected to be driven by its focus on ISR unmanned systems, training, cyber security, Standard Missile-6, Patriot, Zumwalt and THAAD.
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.
Raytheon is slated to release its earnings for the third quarter of fiscal 2011 on October 27, 2011. The Zacks Consensus Estimate for the third quarter is $1.32, representing a year-over-year increase of 5.03%. The Zacks Consensus Estimate for fiscal 2011 is $5.00, down an estimated 10.36%. Raytheon has showed a consistent track record in surpassing earnings estimates in the last four quarters with a trailing four-quarter average of 19.87%.
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. The company mainly competes with Northrop Grumman Corporation (NOC) and Lockheed Martin Corporation (LMT).
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