) has received an indefinite delivery/indefinite quantity (IDIQ)
contract from the U.S. Air Force for Network-Centric Solutions-2
(NETCENTS-2) Application Services.
Raytheon has been able to secure a place among the six awardees
under the IDIQ that has a total combined maximum value of $960
million. Per the deal, Raytheon will supply an indefinite amount
of IT related products and services for seven years to the U.S.
Air Force. NETCENTS-2 supports the U.S. Air Force division by
providing migration, integration, training, help desk, testing
and program operations. Thus, this contract enables Raytheon to
aid the U.S. Air Force in upgrading its service by installing
secure communications network and mission-critical applications,
saving cost and time.
Among the large-cap defense players, Raytheon is one of the
best-positioned companies. Going forward, revenue and earnings
growth would continue to be driven by its strong presence in the
areas of Intelligence, Surveillance and Reconnaissance (ISR); air
& missile defense systems; border security; air traffic
management; training and homeland security; and cyber security.
Late last month, the company reported its second quarter 2013
earnings that exceeded our expectation by 26.1% and were also
above the year-ago profit level by 4.5%. The beat was driven by
strong program execution and the ability of the company to match
the security needs of its customers through premium quality
Raytheon continues to surpass earnings expectations, thanks to
its consistent research and development efforts. State-of-the-art
technology and missiles developed by the company allow it to have
a competitive edge and ensure a continuous flow of contracts from
the U.S. defense department and from its global customers.
In addition, Raytheon's focus on business diversification will
lend substantial upside to returns. The strategic buyout of
Visual Analytics Inc. at the end of the second quarter will
further boost the company's expertise in the field of data
analysis, an effective defense tool to counter terrorism.
Raytheon currently holds a Zacks Rank #1 (Strong Buy). Other
defense operators also worth mentioning are Zacks Ranked #2 (Buy)
Lockheed Martin Corp
Huntington Ingalls Industries, Inc.
Northrop Grumman Corporation
HUNTINGTON INGL (HII): Free Stock Analysis
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RAYTHEON CO (RTN): Free Stock Analysis Report
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