Raytheon Gets Security Contract – Analyst Blog

Raytheon Company (RTN) was awarded an $88 million task order to install passenger checkpoint screening equipment at airports in the U.S. The task order was issued under the Transportation Security Administration’s Security Equipment Integration Services contract. Raytheon will be responsible for installing equipment that includes a wide range of technologies. The contract began March 24 and ends March 23, 2011.

 

Raytheon is a prime contractor or major subcontractor for numerous U.S. Government programs. The company’s total net sales to the U.S. Government were $22 billion in 2009, $20.2 billion in 2008 and $18.3 billion in 2007, representing 88%, 87% and 86% of total net sales in 2009, 2008 and 2007, respectively.

 

Raytheon’s principal U.S. Government customer is the Department of Defense. Other U.S. Government customers include the Departments of Homeland Security, Justice, State and Energy, Intelligence Community agencies, National Aeronautics and Space Administration and Federal Aviation Agency.

 

Raytheon ended fiscal 2009 with an order backlog of $36.9 billion compared to $38.9 billion at the end of fiscal 2008. Funded backlog as of fiscal-end 2009 stood at $23.5 billion.

 

Raytheon is one of the largest aerospace and defense companies in the U.S. It provides state-of-the-art electronics, mission systems integration and other capabilities in the areas of sensing; effects; and command, control, communications and intelligence systems, as well as a broad range of mission support services.

 

We continue to view Raytheon as one of the best positioned companies among the large-cap defense primes due to its non-platform-centric focus, strong order bookings and order backlog, healthy cash flow generation and focus on shareholder value.

 

Defense contractors with significant exposure to high-cost platform programs include Lockheed Martin Corporation (LMT), Northrop Grumman Corporation (NOC), and General Dynamics Corporation (GD).