Raytheon Company
(
RTN
) has received a Foreign Military Sales ("FMS") contract worth
$685.7 million from the U.S. Army Aviation and Missile Command,
Redstone Arsenal, Alabama for additional new fire units of the
combat-proven Patriot Air and Missile Defense System for
Taiwan.
Patriot is a long-range, all-altitude, all-weather air defense
system to counter tactical ballistic missiles, cruise missiles and
advanced aircraft. It is the world's most competent air and missile
defense system that protects against a full range of advanced
threats, including aircraft, tactical ballistic missiles, cruise
missiles and unmanned aerial vehicles. With these new Patriot fire
units, the company will provide new advanced technology, improved
man-machine interface and reduced life-cycle costs to the Patriot
Air and Missile Defense System.
The team will work under the contract at Raytheon's Integrated
Air Defense Center, Andover, Massachusetts; El Paso, Texas; and
Huntsville, Alabama.
Raytheon is the prime contractor for both domestic and
international Patriot Air and Missile Defense Systems and system
integrator for Patriot Advanced Capability-3 missiles. The company
has been partnering with Taiwan for more than 45 years.
The company's contract with Taiwan includes a $79 million FMS
order in 2008 to provide it with upgraded kits and related
engineering and technical services for Patriot Configuration-3
radar and a $1.1 billion contract in 2009 to provide new-production
systems of the Patriot Air and Missile Defense System. Earlier in
2011, the company delivered the first Configuration-3 upgraded
radar system to Taiwan, 10 months ahead of schedule.
Raytheon Company is a technology and innovation leader
specializing in defense, homeland security and other government
markets throughout the world. The company 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.
Raytheon is one of the best-positioned companies and enjoys
strong order bookings and order backlog, an improving balance
sheet, growing cash flow, and operational improvements. 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.The company
presently retains a short-term Zacks #3 Rank (Hold) that
corresponds with our long-term Neutral recommendation on the stock.
The company mainly competes with
Lockheed Martin Corporation
(
LMT
) and
Northrop Grumman Corporation
(
NOC
).
LOCKHEED MARTIN (
LMT
): Free Stock Analysis Report
NORTHROP GRUMMN (
NOC
): Free Stock Analysis Report
RAYTHEON CO (
RTN
): Free Stock Analysis Report
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