Another Navy Deal for Raytheon - Analyst Blog

Defense contractor Raytheon Company (RTN) announced that it received a contract worth $55.4 million from the U.S. Navy for production of a test site for the Aegis missile-defense system.

The current contract modifies an earlier contract to exercise an option for the production of an Aegis ashore test site transmitter and fire control system. Raytheon will perform the work in Andover, Massachusetts, and complete it within December 2015.

The Aegis missile defense system was developed by the U.S Department of Defense to provide defense against ballistic missiles. The defense system enables the warships to shoot down enemy missiles and this system currently uses Lockheed Martin Corporation’s (LMT) Aegis Weapon System and the Raytheon RIM-161 Standard Missile 3 (SM-3).

Raytheon has won quite a few U.S. Navy contracts relating to the Aegis weapon defense system, a few recent ones being a $46.9 million contract to produce transmitter group, fire-control system and engineering for the shipboard Aegis weapons system, a $13.7 million contract to upgrade the Aegis weapons system for several Arleigh Burke-class destroyers and Ticonderoga-class cruisers and another $59.2 million contract to produce critical Aegis components for DDG 114 and DDG 115 – future Arleigh Burke-class destroyers.

Raytheon currently retains a Zacks #3 Rank (short-term Hold rating). We presently maintain a Neutral rating on the stock. The major peers of the company are Boeing Company (BA), Lockheed Martin Corporation and Northrop Grumman Corporation (NOC).

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.