The U.S. Air Force has awarded Computer Sciences Raytheon, a
joint venture of
Computer Sciences Corporation
), an $82.1 million contract to provide operations, maintenance and
sustainment of critical range and launch processing systems. Under
the contract, services will be procured to support the launch
processing mission of the 45th Space Wing.
The 45th Space Wing is a United States Air Force unit. It is
assigned to the Fourteenth Air Force, stationed at Patrick Air
Force Base, Florida. It commands Patrick Air Force Base and the
Cape Canaveral Air Force Station. The mission of the 45th Space
Wing is to assure access to the high frontier and to support global
operations. The wing currently operates a number of rockets and
missiles, including the active expendable launch systems - Delta IV
and Atlas V. The 45th Space Wing also provides support for the
Department of Defense, NASA, and commercial manned and unmanned
Raytheon is one of the best-positioned companies among the
large-cap defense players due to its non-platform-centric focus, as
well as its strong order bookings and order backlog of more than
$33.9 billion at the end of the first half of 2012.
Earlier, in second quarter 2012, Raytheon's earnings from
continuing operations were $1.41 per share compared with $1.20 per
share in the prior-year quarter. This was driven by operational
improvements and capital deployment events. Reported earnings
surpassed the Zacks Consensus Estimate of $1.21 per share. Revenue
was $5.99 billion, down 3.4% year over year from $6.20 billion in
the year-ago period. Quarterly revenue missed the Zacks Consensus
Estimate by $30 million.
In its earnings press release, Raytheon increased its 2012 earnings
guidance to a range of $5.70-$5.85 per share from its previous
expectation of $5.55-$5.70 per share. On the other hand, the
company maintained its sales guidance in a range of $24.5-$25
billion for 2012.
Revenue and earnings growth continue to be driven by a strong
presence in the areas of Intelligence, Surveillance and
Reconnaissance; air & missile defense systems; border security;
air traffic management; training and homeland security; and cyber
security. Also, its non-platform centric focus insulates it from
cancellation or deferral of any specific platform programs.
Looking forward, the company enjoys strong order bookings and order
backlog, an improving balance sheet, and growing cash flow, besides
operational improvements. Future growth will 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. Thus, over the
longer run, we maintain our long-term Neutral recommendation on the
stock. The company presently retains a short-term Zacks #3 Rank
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
L-3 Communications Holdings Inc.
FLIR Systems Inc.
COMP SCIENCE (CSC): Free Stock Analysis Report
FLIR SYSTEMS (FLIR): Free Stock Analysis Report
L-3 COMM HLDGS (LLL): Free Stock Analysis
RAYTHEON CO (RTN): Free Stock Analysis Report
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