) secured three contracts, amounting to $265.3 million, from
Pentagon's funding list yesterday.
The largest of the three contracts, worth $223.1 million, was
awarded to Raytheon's Missile Systems division of Tucson, AZ. Per
the contract, the company will provide 485 new Sidewinder Missiles
- AIM-9X Block II All Up Round Tactical Low Rate Initial Production
Lot 14 Missiles - for the U.S. Navy, the U.S. Air Force as well as
for the governments of Singapore, the Netherlands, Kuwait and
Apart from other related units, the contract also entitles Raytheon
to procure 132 Block II Captive Air Training Missiles for the U.S.
Navy, U.S. Air Force, and the governments of the Netherlands,
Singapore and Morocco. Work under this contract will likely run
till Dec 2016.
The AIM-9X Block II missile is an advanced version of Raytheon's
AIM-9X Block I Sidewinder infrared-guided, air-to-air missile that
features a lock-on-after-launch capability, redesigned fuse and a
one-way forward-quarter datalink capability. Unlike the AIM-9, the
AIM-9X can even be used against targets on the ground.
The second contract, a minor one worth $28.2 million, also went to
Raytheon Missile Systems. This modification contract calls for
Raytheon to provide 774 AIM-9X Production Inertial Measurement
Units retrofits and upgrades for the U.S. Navy and the U.S. Air
Force. Additionally, the contract covers the procurement of 30
AIM-9X Block II All Up Round Tactical Low Rate Initial Production
Lot 14 Missiles and 30 Block II Captive Air Training Missiles.
Apart from that, 18 All Up Round Containers, 1 Spare Advanced
Optical Target Detector, 2 Spare Tactical Guidance Units, 8 Spare
Captive Air Training Missile Guidance Units, and 1 lot of tooling
for the government of Belgium are also on order. The contract runs
through Dec 2016.
As per the third contract, Raytheon will provide engineering and
technical services required to support the ongoing development and
life cycle support of the NATO SEASPARROW Surface Missile System
(NSSMS), for $14.1 million. Raytheon will offer NSSMS design agent
and special engineering tasks along with land-based test site
support, software maintenance support as well as logistics
management support services. This contract is slated to be
completed by Jun 2016.
Raytheon 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.
The company's unwavering focus on technological advancement, as
exemplified by its evolving GaN systems, will fetch lucrative
orders from the military. Its business consolidation efforts will
also provide successful cost-saving solutions, leading to expanding
operating margin in the long term. The 2014 fiscal budget puts
emphasis on Raytheon's prominent programs including Missile and
Space systems, which will boost the company's revenue stream.
On Jun 19, Raytheon Missile Systems division won a contract
modification valued at $391.5 million to build radio-controlled
anti-tank missiles for the U.S. Army and Marine Corps, as well as
for the Saudi Arabia and Oman militaries. Deliveries will continue
through Mar 2018.
In spite of the steady tricking in of low-priced contracts, the big
ticket items still elude these defense majors. The tepid budget
scenario seems to have put the lid on big awards in a sluggish
Raytheon currently holds a Zacks Rank #3 (Hold). Favorably ranked
Northrop Grumman Corp.
). While Arotech carries a Zacks Rank #1 (Strong Buy), Embraer and
Northrop hold a Zacks Rank #2 (Buy).
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