) announced that the U.S. Navy has purchased two more digital-based
radar systems. The new radar systems are scheduled to be installed
at military bases in New River, North Carolina, and Quantico,
Virginia. The new radars will replace the old analog-based air
traffic control system at these bases.
The U.S. Navy continuously looks to upgrade its air traffic
control systems. The replacement of analog radars with
digital-based technology is part of the U.S. National Airspace
System (NAS) Modernization Program. Raytheon's Digital Airport
Surveillance Radar (DASR) ASR-11 has the desired qualities and has
already been installed in more than 130 sites globally.
The ASR-11 system has two electronic subsystems, a primary and a
secondary surveillance radar. The primary surveillance radar has
coverage capacity up to 60 miles while the secondary surveillance
radar has coverage capacity up to 120 miles. These radars aid the
air traffic controller with improved aircraft detection and better
weather display. This enables the controller to maintain safety in
the airspace, which is becoming busier every passing day.
These radars are designed to be fully operational in unattended
operation using redundant subsystems. The radars have built-in test
equipment and can be fully controlled and monitored from multiple
locations. These factors allow the operators to provide critical
air traffic services when the existing infrastructure fails to
Raytheon continues to develop its radar system technology and
has an edge over competition. The company continues to receive
defense contracts. In March 2012, Raytheon was awarded a $45.5
million contract by the U.S. Army for prototype development of Ku
Band Multi-Function RF System (MFRFS) Sense and Warn (S&W)
radars. This agreement is an extension of the U.S. Army's Future
Combat Systems (
Raytheon with a multi-sector exposure enjoys a strong balance
sheet and cash flow. Not unlike other operators, Raytheon, too,
derives the majority of revenues from U.S. defense spending.
Consequently, any cutback in the defense budget would affect the
financials of the company.
The company is scheduled to release its first quarter 2012
earnings on April 26, 2012. The Zacks Consensus Estimates for
revenue and earnings per share for the quarter are $5.77 billion
and $1.16, respectively.
Raytheon Company presently retains a short-term Zacks #4 Rank,
which translates into a Sell rating. A similar bearish sentiment
rings true for its peer
Northrop Grumman Corporation
), another Zacks #4 Ranked company.
Based in Massachusetts, Raytheon Company deals 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.
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RAYTHEON CO (
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