Raytheon Company
(
RTN
) announced that it has received a $45.9 million contract
modification to a previously awarded firm-fixed-price contract for
the procurement of 123 Tomahawk Block IV Composite Capsule
Launching Systems ("CCLS") for the U. S. Navy. The Naval Air
Systems Command, Patuxent River, Maryland, is the contracting
activity.
The CCLS is a water tight encapsulating system in which the
Tomahawk missile is loaded, shipped and launched from Navy
submarines. Work will be performed in Tucson, Arizona;
Lincoln, Nebraska; Camden, Arkansas; Rocket Center, West Virginia;
Carpentersville, Illinois; Joplin, Missouri; Hopkinton,
Massachusetts; Huntsville, Arkansas; and Alamitos & Torrance,
California. Raytheon expects to finish work on the contract by July
2014.
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
$34 billion at the end of the first quarter of 2012.
Revenue and earnings growth continue to be driven by a 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. 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. The company presently
retains a short-term Zacks #1 Rank (Strong Buy).
The positives are, 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.
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. Some of its main competitors include
The Boeing Company
(
BA
) and
Lockheed Martin Corporation
(
LMT
).
BOEING CO (BA): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis
Report
RAYTHEON CO (RTN): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment
Research