) 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. This was also the fifth consecutive
test of the next-generation SM-3 Block IB guided missile.
The company is on track to supply the SM-3 Block IB in 2015 to
meet global combatant command requirements, and specifically
phase two of the European Phased Adaptive Approach. The SM-3
Block IB comes in both land-based and sea-based modes.
The SM-3 missiles incapacitate any incoming ballistic missile
threat by colliding with them. To date, over 155 SM-3s have been
supplied to the naval forces of U.S. and Japan. The SM-3 program
has been the most successful defense product offering from
Recently, Raytheon received a big order from the Department of
Defense (DoD) for the delivery of 86 Standard Missile 6 (SM-6)
Block I All Up Rounds including spare parts and containers for
the U.S. Navy.
Raytheon is expected to be among the few defense contractors
to effectively weather the steep budget cuts by the U.S.
government. The 2014 defense budget will retain or boost funding
for most of Raytheon's notable programs like the SM-3 missile
interceptor, the Advanced Medium-Range Air to Air Missile
(AMRAAM) and the Standard Missile-2 and SM-6 ship defense
The U.S. defense is expected to procure 52 SM-3 Block IB
missiles which will substantially add to Raytheon's sales book.
Raytheon's AMRAAM project would also turn out to be a key winner
with the DoD proposing $435 million worth of order flow in 2014.
Moreover, the proposed increase in defense budget by Japan might
bring in lofty foreign military sales contracts.
However, the cancellation of the SM-3 Block IIB version was a
blow to the company. Currently, Raytheon holds a Zacks Rank #2
(Buy). Other well-placed operators include Zacks Ranked #2
Lockheed Martin Corp.
B/E Aerospace Inc.
Northrop Grumman Corp.
B/E AEROSPACE (BEAV): Free Stock Analysis
LOCKHEED MARTIN (LMT): Free Stock Analysis
NORTHROP GRUMMN (NOC): Free Stock Analysis
RAYTHEON CO (RTN): Free Stock Analysis Report
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