) got the U.S. naval contract for MK15 Phalanx Close-In Weapon
System (CIWS). This is a modification contract worth $115.5
The contract calls for Raytheon to provide CIWS upgrades and
conversions, system overhauls and associated hardware. The company
expects to complete the task by Sep 2017. The Naval Sea Systems
Command, Washington, District of Columbia, is the contracting
The Phalanx Close-In Weapon System (CIWS) - a vital part of the
Fleet Defense In-Depth concept and the Ship Self-Defense Program -
is an automatic "terminal defense" weapon system to detect, track,
engage, and destroy anti-ship missiles that have already
infiltrated outer defense envelopes.
Given the declining U.S. defense spending trend, Raytheon is one of
the best-positioned companies among the large-cap defense players
due to its non-platform-centric focus. Its diversified military
products and GaN technology have helped the company gain a mixture
a small and big defense contracts.
Through the constant upgrade of ship self-defense systems to meet
the evolving nature of threats and advances in computer technology,
the company has successfully met its customers' requirements.
Earlier this year, Raytheon won a contract modification from the
U.S. Department of Defense (DoD) for engineering and technical
support work on the Navy's Phalanx, SeaRAM, and Land-based Phalanx
Weapon Systems. The contract, worth $52.1 million, is essentially
for maintenance, reliability, and improvements and will run through
Jan 2015. Though the contract is not much to speak of, such
small-ticket contracts still offer some respite from severe budget
Although the U.S. Department of Defense (DoD) dependency has aided
top-line growth in the past, there is no assurance that the company
will continue receiving high-value contracts at regular intervals
taking into account the current budget uncertainty.
In fact, the Massachusetts-based defense contractor - Raytheon -
currently holds a Zacks Rank #3 (Hold). However, stocks worth
considering in the defense sector include
Huntington Ingalls Industries, Inc.
The Boeing Co.
). These stocks presently carry a Zacks Rank #2 (Buy).
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