According to media reports,
) has received three contracts with a value of more than $105
million from the Department of Defense.
The company received a $75.9 million cost-plus-fixed-fee contract
to perform Standard Missile engineering and technical services.
Per the contract, the company will be responsible for research
and development work, production engineering, and production
proofing services of the Standard Missile. The company expects
the work on the contract to be completed by Dec 2017. However, it
indicated that if the task on the Standard Missile contract
continues and all the options are exercised, the value of the
contract would increase approximately four times to $316.5
The second cost-plus-fixed-fee, firm-fixed-price contract with a
value of $19.6 million was a modification contract. Per the
contract, the company will perform design and engineering
analysis on AIM-9X Block II Missile Systems for the U.S. Navy,
the U.S. Air Force, and the government of Saudi Arabia. The
company expects the project to be completed in Jun 2014.
Also, the company received a $9.8 million contract for "Plan X"
mission execution software. Per the contract, the company will
design and develop a runtime environment for executing cyber
operations mission scripts.
Raytheon Company 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. Future growth will be driven by its focus on
Intelligence, Surveillance and Reconnaissance unmanned systems,
training, cyber security, Standard Missile-6, Patriot, Zumwalt
and Terminal High Altitude Area Defense.
The company is also working on reorganizing its business through
segment realignment. The restructuring will help the company in
streamlining its operations, increasing productivity and
achieving stronger alignment with customer preferences.
These positives are, however, offset by the uncertainity related
to the 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 Rank #3 (Hold).
However, stocks well positioned at the moment are
Erickson Air-Crane Inc.
Wesco Aircraft Holdings, Inc.
Alliant Techsystems Inc.
). While Erickson Air-Crane carries a Zacks Rank #1 (Strong Buy),
Wesco Aircraft and Alliant Techsystems hold a Zacks Rank #2
ALLIANT TECHSYS (ATK): Free Stock Analysis
ERICKSON AIR-CR (EAC): Free Stock Analysis
RAYTHEON CO (RTN): Free Stock Analysis Report
WESCO AIRCRAFT (WAIR): Free Stock Analysis
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