Defense contractor Raytheon Company (RTN) announced that it received a contract worth $43 million from the Missile Defense Agency (MDA) to continue the maintenance of defense software until March 2011. Raytheon will do the maintenance work at its defense facility in Woburn, Massachusetts.
The Missile Defense Agency is a research, development, and acquisition agency within the Department of Defense. The agency develops, tests, and fields an integrated Ballistic Missile Defense System (BMDS), working closely with the Army, Navy and the Air Force.
Raytheon’s association with MDA dates back to a number of projects. In August 2010, the company announced that it is partnering with Lockheed Martin (LMT) to pursue the U.S. MDA’s Ground-Based Midcourse Defense Development and Sustainment Contract.
During the second quarter of 2010, the Missile Systems segment of Raytheon booked $234 million for Standard Missile-3 (SM-3) from the MDA. The Missile Systems division posted a revenue of $1,415 million in the second quarter 2010 compared with $1,384 million in the year-ago comparable period.
Raytheon’s backlog at the end of second-quarter 2010 was $35.98 billion, comprising $22.46 billion of funded backlog. The backlog at the second-quarter end declined by $0.6 billion from the 2009 year-end level owing to the termination of the UK Border Agency program.
The total revenue of the company at the end of second-quarter 2010 was $5.97 billion compared with $6.12 billion in the year-ago comparable period. The Zacks Consensus Estimates for third quarter 2010, fiscal year 2010 and fiscal year 2011 are $6.48 billion, $25.79 billion and $26.92 billion, respectively.
Raytheon currently retains a Zacks #3 Rank (short-term Hold rating). Given our apprehensions over future growth of the U.S. defense budget, the fate of high-cost programs and risks related to key projects execution, we presently maintain a Neutral rating on the stock.
Based in Waltham, Massachusetts, Raytheon Company, along with its subsidiaries, provides electronics, mission systems integration, and other capabilities in the areas of sensing, effects, and command, control, communications, and intelligence systems, as well as mission support services to its global customers.
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