Defense contractor Raytheon Company (RTN) has received a $107 million contract to help design high-powered radar installations for the U.S. Air Force’s Space Fence program.
Under this contract, Raytheon will develop a preliminary design and test a functional radar prototype to ensure cost effectiveness and certainty of supply as per schedule and technical maturity of the final design in support of Milestone B.
This contract is the second phase of a multiphase acquisition program, leading to the delivery of up to three, globally positioned, S-band radars operating in the U.S. Space Surveillance Network.
In this phase, Raytheon will take the work on the space-surveillance systems a step ahead, reducing the total program risk through the development of a preliminary design with mature technologies that meet or exceed Technology Readiness Level 6 and Manufacturing Readiness Level 6.
The Space Fence system is a modern, net-centric sensor that is used to detect floating space debris that can damage satellites. This system detects the much-smaller objects in low earth orbit and medium earth orbit to provide greater completeness, accuracy, and timeliness in meeting warfighter space situational awareness requirements. The system will replace the existing Air Force Space Surveillance System, which has been in service since the early 1960s.
Given its long heritage in radar development along with the latest technological advancements, the Raytheon Space Fence solution has the capability to provide the Air Force with increased, affordable and much-needed space situation knowledge for many more years to come.
Based in Massachusetts, Raytheon Company is one of the largest aerospace and defense companies in the U.S., with a diversified line of military products, including missiles, radars, sensors, surveillance and reconnaissance equipment, communication and information systems, naval systems, air traffic control systems and technical services.
Earlier this month, Raytheon was awarded a radar contract by the defense behemoth The Boeing Company (BA) to manufacture six long-range, multimission maritime and overland surveillance radars (APY-10) as well as spares for Boeing’s P-8A Poseidon aircraft.
Raytheon will deliver the APY-10 radars to Boeing as part of the P-8A contract with the U.S. Navy. The P-8A replaces the P-3 aircraft and will be used for surveillance along the U.S. coastline.
Going forward, Raytheon expects adjusted earnings in the range of $5.50 – $5.65 per share in fiscal 2011, well above the Zacks Consensus Estimate of $4.98. Net sales for 2011 are expected to be in the range of $25.5 billion – $26.3 billion.
We maintain a ‘Neutral’ recommendation on Raytheon Company in the long term. The quantitative Zacks # 3 Rank (short-term Hold rating) for the company indicates no clear directional pressure on the stock over the near term.
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