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Raytheon Wins $21M Navy Deal to Support SSDS MK 2 Program

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Raytheon Company 's RTN Integrated Defense Systems (IDS) business division recently secured a $21.3-million modification contract to provide continued platform systems engineering to support the Ship Self Defense System (SSDS) MK 2. The deal was awarded by the Naval Sea Systems Command, Washington, DC.

Work related to the deal will be executed in San Diego, CA and is expected to be completed by June 2019. Raytheon will utilize fiscal 2019 research, development, test and evaluation (Navy), procurement (Navy), operations and maintenance (Navy), and fiscal 2014 shipbuilding and conversion (Navy) funds for completing the task.

A Brief Note on SSDS MK 2

Raytheon's Ship Self-Defense System (SSDS) is a distributed combat management system for surface ships, designed to expedite the detect-to-engage sequence to counter Anti-ship cruise missiles (ASCM). SSDS links and automates standalone sensors and weapon systems will provide the required combat reaction.

The SSDS is designed for use in aircraft carriers and expeditionary ships. In operation for more than a decade, SSDS is fielded on seven ship classes.

What Favors Raytheon?

Increasing geo-political tensions across the globe have prompted nations to strengthen their defense arsenal with technologically advanced naval combat, ship electronic and sensing systems. To this end, Raytheon's advanced IDS segment has been clinching pivotal awards from the United States as well as international customers, owing to its high-end, combat management systems.

Such contract wins have been fueling growth in the IDS division, which recorded third-quarter 2018 net sales of $1,493 million, up 7% from the year-ago quarter. Considering the latest contract win, we may project this segment to reflect similar revenue growth, going ahead.

Price Movement

Raytheon's stock has lost 8.4% in the last 12 months, against the industry 's growth of 3.1%. The underperformance may have been caused due to tough competition that the company faces in the defense market.

Zacks Rank & Other Stocks to Consider

Raytheon currently carries a Zacks Rank #2 (Buy).

A few other top-ranked companies in the same sector are Aerojet Rocketdyne Holdings AJRD . Lockheed Martin Corporation LMT and The Boeing Company BA .

While Aerojet Rocketdyne sports a Zacks Rank #1 (Strong Buy), Lockheed Martin and Boeing carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Aerojet Rocketdyne came up with average positive earnings surprise of 19.27% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has increased 43.3% to $1.82 in the past 90 days.

Lockheed Martin delivered average positive earnings surprise of 13.92% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has moved up 2.88% to $17.51 in the past 90 days.

Boeing delivered average positive earnings surprise of 28.01% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has moved up 3% to $15.05 in the past 90 days.

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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 Nasdaq, Inc.


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

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