Defense contractor Raytheon Company (RTN) announced that it acquired Technology Associates Inc. to bolster its existing cybersecurity business. Technology Associates will become a part of Raytheon’s Intelligence and Information Systems (IIS) business.
 
Technology Associates Inc. delivers full life-cycle computer engineering to mission-critical programs in the U.S. intelligence community. This privately held company has capabilities in the field of data extraction and analysis, digital media intercept and exploitation, embedded system programming and information assurance services.
 
Raytheon services the intelligence community and government organizations through its expertise in cybersecurity and information operations. The Technology Associates acquisition will further complement Raytheon’s capabilities to cater to the evolving requirement of customers in mitigating cyber threats. However, the said acquisition is not expected to be materially accretive for Raytheon before the fourth quarter or full year 2010.
 
In the second quarter 2010, the Intelligence and Information Systems business netted sales of $472 million, reflecting a sharp decline from $812 million generated in the year-ago quarter. During the quarter, this segment booked $80 million on the Earth Observing System Data and Information System contract from NASA and also booked $371 million on a number of classified contracts.
 
At the second quarter earnings call, Raytheon provided total revenue expectation, for 2010, in the range of $25.6 billion to $26.1 billion and earnings per share expectation for 2010 in the range of $4.00 to $4.15. The Zacks Consensus Estimate for fiscal 2010 is $4.22 per share.
 
Raytheon currently retains a Zacks #3 Rank (short-term Hold rating). 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.
 
RAYTHEON CO (RTN): Free Stock Analysis Report
 
Zacks Investment Research