) has entered into an agreement with the U.S. Naval Air Systems
Command. Per the contract, the company will manufacture an
integrated multi-intelligence (Multi-INT) system to protect the
warfighters positioned at the forefront. Raytheon's Intelligence,
Information and Services business will be responsible for this
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Specifically, this Persistent Surveillance System Cross Domain
Solution (PSS CDS) will provide the armed forces a detailed
position of imminent threats from classified as well as
The PSS CDS is a software package compact enough to be installed
on aircrafts. This software transmits high-definition
surveillance videos, sensor data, and traditional as well as
non-traditional intelligence, surveillance and reconnaissance
(ISR) images to the armies, forewarning them of upcoming threats.
In addition, PSS CDS provides protection to the forces in terms
of collecting intelligence by utilizing sensors on aerostats,
towers and unmanned aerial vehicles.
Raytheon is flooded with a number of contracts from several
government establishments. The company has a total backlog of
$33.5 billion at the end of first-quarter 2013. Recently,
Raytheon won a contract, worth $126 million, from the Department
of Defense for the procurement of material needed to manufacture
up to 29 Standard Missile-3 Block IB missiles. Also, Raytheon
received a sizeable $534.8 million firm-fixed-price contract for
the production of Advanced Medium-Range Air-to-Air Missiles for
the U.S. Air Force and the militaries of Oman and Saudi Arabia.
The defense operators' performance primarily depends on the
orders coming from the national and international defense
establishments. With the risk of U.S. defense budget-cuts
appearing large, we believe the defense companies' attempt toward
wining foreign contracts will enable them to offset the decline
in domestic orders.
Raytheon currently has a Zacks Rank #3 (Hold). Other stocks from
the sector that are presently performing well include
The Boeing Company
Northrop Grumman Corporation
Alliant Techsystems Inc.
). All these stocks carry a Zacks Rank #2 (Buy).