Raytheon Company
(
RTN
) has received a $125.3 million contract from The Missile Defense
Agency ("MDA") and the U.S. Air Force. As per the contract, the
company will be involved in the modernization and addition of a new
competence power to an Air Force early warning radar ("EWR")
system.
Early warning radar is high-powered mission-critical and large
phased-array radar. Post up gradation, the EWR will be targeting
data that can be used to shoot down incoming ballistic missiles,
besides providing early warning of missile launches and space
surveillance.
In the up gradation process, the company will make use of the
existing phased-array radar face and affix improved electronics and
software in order to improve the performance and target detection.
The company expects the work to get completed by 2017. Till the
completion of the up gradation, the currently deployed EWRs will
continue uninterrupted operation, safeguarding the U.S. and its
allies. The improvisation will allow the U.S. and its allies to
detect and defend against missile launches with better skill.
Moreover, the upgraded radar will continue to perform as part of
the Missile Warning and Space Surveillance Networks, and will be
integrated into the MDA's Ballistic Missile Defense System as a
part of the layered defense of the United States.
The MDA is a research, development, and acquisition agency within
the Department of Defense. Its workforce includes government
civilians, military service members, and contractor personnel in
multiple locations across the United States. The company follows a
trend of receiving contracts from MDA. Recently, in September, the
company had received a $230 million contract from MDA for 14
Standard Missile-3 Block IA missiles and five SM-3 Block IB
missiles.
Based in Waltham, Massachusetts, Raytheon Company is a technology
and innovation leader specializing in defense, homeland security
and other government markets throughout the world. The company
provides high-tech 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 plays an important role in missile defense and is ideally
positioned to help the United States and its allies achieve current
and future missile defense goals. Given the declining trend in the
U.S. defense spending, the company is one of the best-positioned
companies among the large-cap defense players. Looking forward, the
company enjoys strong order bookings and order backlog, an
improving balance sheet, growing cash flow and operational
improvements.
However, these positives are offset by apprehensions over 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 #3
Rank (Hold) that corresponds with our long-term Neutral
recommendation on the stock.
Some of its main competitors are
L-3 Communications Holdings Inc.
(
LLL
) and
FLIR Systems, Inc.
(
FLIR
).
FLIR SYSTEMS (FLIR): Free Stock Analysis Report
L-3 COMM HLDGS (LLL): Free Stock Analysis
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RAYTHEON CO (RTN): Free Stock Analysis Report
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