) has received a contract worth $80.5 million for the supply of
Joint Standoff Weapon (JSOW) C-1's to the U.S. Navy.
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The supply of JSOW missiles is expected to begin in the second
quarter of 2014. The JSOW C-1 will add a weapon datalink radio
and modified seeker software to the existing JSOW C, thereby
increasing the anti-surface warfare mission capability of JSOW C.
While maintaining their potential against stationary land
targets, these weapons are designed to provide fleet forces with
flexibility to engage moving maritime targets.
The JSOW family of precision strike weapons is a joint US Navy
and US Air Force program based on a modular design that uses a
common airframe, guidance systems and flight control. JSOW uses
an autonomous, integrated Global Positioning System and Inertial
Measurement System navigation system. JSOW is designed to destroy
soft and hardened targets, including armored vehicles and fixed
structures. The missile has a maximum range of 70 km that ensures
delivery outside the lethal range of most enemy air defenses.
In June this year, Raytheon won a U.S. Navy contract for
AGM-154C-1 Joint Standoff Weapons ("JSOW"). The contract was for
200 units of Full Rate Production Lot 9 of JSOW.
Despite the adverse effects of sequestration on the defense
budget, Raytheon along with other defense primes like
Lockheed Martin Corp.
Northrop Grumman Corp.
) has received a steady flow of contracts. Recently, Raytheon won
a delivery contract, worth $9.6 million, from the U.S. Department
of Defense (DoD). The contract, a part of the earlier issued
Basic Ordering Agreement, deals with restoration of the H-60
Multi-Spectral Targeting System forward looking infrared turrets.
Earlier, the company won a major part of the $375 million DoD
contracts issued on Jul 8, 2013. The company has been awarded a
cost-plus-incentive-fee contract with a value of $279.4 million
for the development of a new electronic jammer for the U.S. Navy.
This contract for the technology development phase of the Next
Generation Jammer will replace the ALQ-99 tactical jamming system
used on the U.S. Navy EA-18G Growler electronic-attack aircraft
The Boeing Company
Despite the declining trend in U.S. defense spending, Raytheon is
one of the best-positioned companies among the large-cap defense
players due to its non-platform-centric focus. Going forward, we
expect the company to continue to remain well positioned based on
its realigned segments, international exposure, strong order
bookings and order backlog, cash deployment strategy, improving
balance sheet, growing cash flow and cost reduction initiatives.
Despite these positives, we remain concerned about the 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 Zacks Rank #3