Raytheon Company
(
RTN
) has received a $57.8 million contract for overhaul and
modernization of 9 Phalanx Close-In Weapon Systems, production of 2
SeaRAM anti-ship missile defense systems and order for 20 radar
upgrade kits.
The Phalanx Close-In Weapon System ("CIWS") is an anti-ship
missile defense system that consists of a guided 20mm Gatling gun
mounted on a swiveling base. Its rapid-fire, computer-controlled
radar with its automated-nature of operation effectively tracks and
destroys enemy threats that have infiltrated other ship defense
systems. It was manufactured by Pomona Division, an erstwhile unit
of
General Dynamics Corporation
(
GD
) and now a part of Raytheon.
SeaRAM combines the features of Phalanx CIWS and the Rolling
Airframe Missile ("RAM") Guided Weapon System. Therefore, it has
Phalanx Block 1B's high resolution search-and-track sensor systems
and reliable quick-response capability and RAM's superior accuracy,
extended range and high maneuverability.
Among the large-cap defense players, Raytheon is one of the
best-positioned companies. Through the constant upgrade of ship
self-defense systems, to meet the evolving nature of threats and
computer technology, the company has successfully met its
customers' requirements. Phalanx and SeaRAM are defense solutions
that lead the world in scalable technology as well as provide
supreme protection.
Going forward, the company enjoys an improving balance sheet,
growing cash flow, and operational improvements. We expect future
growth will be driven by its focus on Intelligence, Surveillance
and Reconnaissance unmanned systems, training, cyber security,
Standard Missile-6, and Theatre High Altitude Area Defense.
This is, however, offset by apprehensions over cutbacks in 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 short-term Zacks #3 Rank (Hold) that
corresponds with our long-term Neutral recommendation on the
stock.
Based in Massachusetts, Raytheon Company is a technology and
innovation leader specializing in defense, homeland security and
other government markets throughout the world. Raytheon provides
state-of-the-art electronics, mission systems integration and other
capabilities in the areas of sensing, effects, and command,
control, communications and intelligence systems, as well as a
broad range of mission support services.
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