Raytheon's ESM Clears Field Test - Analyst Blog

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As part of a new product improvement program, Raytheon Company ( RTN ) has successfully completed a field test of an advanced Electronic Support Measure ("ESM") seeker that is installed on a Block IV Tomahawk missile.

ESM comprises an advanced and modernized processor and antenna that have the capability to locate and track moving as well as fixed emitting targets. ESM has succeeded in the test only after seven months of testing in anechoic chambers in high-density environment.

Originally manufactured by General Dynamics Corp. ( GD ), Tomahawk is currently manufactured by Raytheon. The combat-proven Tomahawk is the world's most capable cruise missile and is ideally suited for critical long-range and precision-strike missions. Raytheon continues to evaluate Tomahawk's technical and operational capabilities with the U.S. Navy.

Tomahawks can fly into heavily defended airspace and precisely strike high-value targets with minimal collateral damage. The Tomahawk Block IV missile includes a two-way satellite data-link that enables a strike controller to redirect the missile in-flight to preprogrammed alternate targets or more critical targets. This newly added feature has enhanced the capability of the Tomahawk Block IV.

Recently, the company has successfully test fired a Standard Missile-3 (SM-3) Block IB for the Missile Defense Agency from the U.S. Navy's guided-missile cruiser, USS Lake Erie. The SM-3 is the newest incarnation of U.S. defense missile technology and replaces the medium-range ballistic missile. The latest test was the 26th successful intercept for the SM-3 program, the highest to date.

Given the current defense budget uncertainty, threat of sequestration and partial U.S. government shutdown, Raytheon's continuous efforts to modernize its products would support its top line.

The president's defense budget for FY14 calls for maintaining or augmenting funding for most of the company's biggest programs, which include the Standard Missile-3 (SM-3) missile interceptor, the Advanced Medium-Range Air to Air Missile and the SM-2 and SM-6 ship defense missiles. Other programs include AIM-9X Sidewinder, Evolved SeaSparrow, Javelin anti-tank missile, Joint Standoff Weapon, Rolling Airframe Missile, Small Diameter Bomb II and Tactical Tomahawk.

On the back of the company's strong program execution and its ability to match the security needs of its customers by offering premium quality products, the company presently has a short-term Zacks Rank #2 (Buy). Other well-placed stocks are Lockheed Martin Corp. ( LMT ) and Northrop Grumman Corp. ( NOC ), both with a short-term Zacks Rank #2 (Buy).



GENL DYNAMICS (GD): Free Stock Analysis Report

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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: GD , LMT , NOC , RTN

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