Raytheon Company (RTN) received authorization from the U.S. Air Force to begin Low Rate Initial Production (“LRIP”) of its Miniature Air Launched Decoy Jammer (“MALD-J”) variant. Concurrently, the Air Force also exercised a contract option and Raytheon received a $5 million order to convert Lot 4 MALD production of the baseline to the MALD-J variant.

MALD is a high-tech, low-cost flight vehicle that is modular, air-launched and programmable. It weighs less than 300 pounds and has a range of approximately 500 nautical miles.

The variant protects aircrews and their aircraft by duplicating the combat flight profiles and signatures of U.S. and allied aircraft that confuses enemy air defenses. MALD-J will help in saving the lives of aviators as the commanders will be able to use MALD-J to conduct dangerous stand-in jamming missions instead of using manned aircraft.

Besides maintaining the features of the basic MALD platform, it adds more to the radar-jamming capability. The company expects to begin delivery in 2012.

Based in Waltham, Massachusetts, Raytheon Company is a technology and innovation leader specializing in defense, homeland security and other government markets throughout the world. It is one of the best-positioned companies among the large-cap defense players because of its non-platform-centric focus.

Looking forward, the company enjoys strong order bookings and order backlog, an improving balance sheet, growing cash flow, and operational improvements. Future growth will be driven by its focus on ISR unmanned systems, training, cyber security, Standard Missile-6, Patriot, Zumwalt and THAAD.

The positives are, however, offset by apprehensions over future growth of the U.S. defense budget, the fate of high-cost programs, risks related to key project executions and order cancellations.

Raytheon currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We also have a long-term Neutral recommendation on the stock. The company competes with The Boeing Company (BA) and Northrop Grumman Corporation (NOC), both of which a presently retain Zacks # 3 Ranks (short-term Hold).

In October this year, Raytheon reported third-quarter 2011 adjusted earnings of $1.39 per share, beating the Zacks Consensus Estimate of $1.33. Results were also higher than the year-ago quarterly earnings of $1.35 per share. The Zacks Consensus Estimate for fourth quarter and fiscal 2011 are $1.35 and $5.05, respectively.

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