RTX Corporation’s RTX business unit, Collins Aerospace, recently clinched a $36 million contract from the U.S. Air Force Research Laboratory for satellite communications pod. Per the contract, Collins will develop and demonstrate a platform-agnostic, Beyond-Line-Of-Sight, satellite communications pod.
Benefits of the Deal
The communications pod, to be developed by RTX, will deliver warfighters' data and communications that are reliable, have high bandwidth and low latency, directly to the cockpit. The pod combines military and commercial satellites to strengthen the host system.
Military leaders will have improved situational awareness to make quicker, better decisions across the battlespace with the help of this durable communications terminal, which is built to survive under adverse conditions.
RTX’s Prospects in Military Communications
Increasing geopolitical tensions across the globe have prompted nations to strengthen their defense systems manifold. Notably, military communications, including airborne, air-ground, underwater, ground-based and shipborne communications, form an integral part of a nation’s defense system for safe and secured data transmission. Consequently, interoperability and better security of military services are the factors driving the growth of the military communications market.
With North America constituting the largest portion of the global military communications market, buoyed by increasing technological advancements in the region, RTX enjoys an esteemed position in this market.
Notably, modernized military communication systems and sophisticated software-defined radio technologies offered by Collins Aerospace provide advanced effectiveness in military communications. Also, the company’s military communication systems integrate seamlessly with existing platforms at very low operating costs.
These features must have made RTX’s military communication systems the preferred choice by the Pentagon, as is evident from the latest contract win.
The global military communications market size is projected to grow from $33.4 billion in 2020 to $40.6 billion by 2025, at a CAGR of 4%, as predicted by the Markets and Markets research firm. Such solid growth projections should boost RTX’s top-line performance in the coming days.
What About Other Defense Majors?
The aforementioned growth prospects of the global military communications market bode well for other defense primes that are engaged in the communications market. These are:
Lockheed Martin’s LMT next-generation communication systems include the Whetstone system developed to extend communications to soldiers out of range of conventional networks, Warfighter Information Network - Tactical (WIN-T) system that provides Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR) capabilities, and a few more.
LMT boasts a long-term earnings growth rate of 6.5%. The Zacks Consensus Estimate for LMT’s 2023 sales implies an improvement of 0.9% from the 2022 reported figure.
L3Harris Technologies’ LHX product portfolio includes tactical SATCOM terminals, RO Tactical Radio and RO-Mobile Awareness program, which provide rapid, global push-to-talk and visual Situational Awareness capabilities for users in remote locations.
LHX boasts a long-term earnings growth rate of 3%. The consensus estimate for LHX’s 2023 sales suggests an improvement of 7.9% from the 2022 reported figure.
Northrop Grumman NOC has been a leader in the design, development and delivery of end-to-end communications and advanced networking capabilities sought out by the U.S. and allied military forces for more than 60 years. The company’s networked information solutions business unit develops advanced communications and network systems like F-35 Communications, Navigation and Identification integrated avionics system and Airborne Signals Intelligence Payload.
NOC boasts a long-term earnings growth rate of 4.1%. The Zacks Consensus Estimate for NOC’s 2023 sales indicates an improvement of 5.5% from the 2022 reported figure.
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