) has been awarded a $337.8 million firm-fixed-price contract for
the procurement of 361 Tomahawk Block IV All-Up-Round missiles for
the U.S. Navy. The Tomahawk Block IV missile is capable of
launch from surface ships equipped with the Vertical Launch System
(VLS) and submarines equipped with the Capsule Launch System
Out of 361 missiles for the procurement, 238 would be VLS
missiles and the rest CLS missiles. The Naval Air Systems Command,
Patuxent River, Maryland, is the contracting activity.
Work on the contract will be performed mainly in Tucson,
Arizona; Camden, Arkansas; Ogden, Utah; Anniston, Alabama;
Minneapolis, Minnesota; Fort Wayne, Indiana; Glenrothes, Scotland;
Dallas, Texas; Spanish Fork, Utah; and various locations inside and
outside the continental United States. Work on the contract is
expected to be completed in August 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
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 #2 Rank (Buy).
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.
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
Lockheed Martin Corporation
BOEING CO (BA): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis
RAYTHEON CO (RTN): Free Stock Analysis Report
To read this article on Zacks.com click here.