Defense contractor Raytheon Co. (RTN) seems to be on a winning streak grabbing six back-to-back orders from Pentagon last Friday, Jun 27, 2014, amounting to $469.2 million.
As per the contract breakdown, a major share, worth $275.4 million, went to its Missile Systems unit for fiscal 2014 Standard Missile 6 (SM-6) all-up rounds, and SM-6 and Standard Missile 2 (SM-2) spares and containers. This is a modification contract slated for completion in Mar 2017.
A sizable award, valued at $80.8 million, was received from the U.S. Air Force for the Lot 7 Miniature Air Launched Decoy Jammer (MALD-J) missile. Per this firm-fixed-price and cost-plus-fixed-fee contract, Raytheon is entitled to include data, mission planning, process verification program and operational flight software for MALD-J missiles. Work under this contract is expected to be performed at Tucson, AZ and be completed by Jun 30, 2016.
Another contract with a value of $51.8 million is a modification one that calls for Raytheon to secure a total of 757 projectiles under the Option 5 Excalibur 155mm increment lb production option for the U.S. Army. The contract has a completion date of Feb 29, 2016.
The fourth contract involves research and development activities related to the company’s integrated power systems power load modules. These modules will be utilized for electromagnetic railgun pulse power containers design, for the fabrication and testing of prototypes. This modification contract with a value of $33.2 million went to Raytheon’s Integrated Defense Systems unit in Tewksbury, MA. Work is slated to be completed by Dec 2016.
Of the two remaining small-value contracts, a modification award for Multi-Spectral Targeting Systems (MTS-C) as well as spares for the U.S. Navy’s special projects aircraft fetched $19.7 million. The MTS-C featuring electro-optic, forward-looking, infra-red, turreted sensor system provides long-range surveillance. The balance $8.3 million came from a cost-plus-fixed-fee contract that went to Raytheon’s Integrated Defense Systems unit. The award will provide maintenance and sustainment services in support of the Norwegian Advanced Surface to Air Missile System. This is a fresh follow-on service contract for the missile system, an interim air defense capability deployed in the Homeland Defense Area 1.
Raytheon 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.
Although the tepid budget scenario seems to have put the lid on big awards in a sluggish defense industry, this defense major has been able to clinch a few modest deals lately. On Jun 25, Raytheon secured three contracts, amounting to $265.3 million, from Pentagon’s order book. Again, the 2014 fiscal budget puts emphasis on Raytheon’s prominent programs including Missile and Space systems, thereby providing a cushion to its revenue stream.
Raytheon currently holds a Zacks Rank #3 (Hold). Favorably ranked stocks include Embraer S.A. (ERJ), General Dynamics Corp. (GD) and Northrop Grumman Corp. (NOC), all carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free 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