Raytheon Company (RTN”>RTN) has received a $320 million order for its Active Electronically Scanned Array (AESA) radar program from domestic and international customers. The AESA radar also known as active phased array radar allows ships and aircraft to broadcast powerful radar signals while still remaining stealthy. Apart from Raytheon, Northrop Grumman Corporation (NOC”>NOC) also manufactures AESA radars.
Raytheon is one of the best-positioned companies among the large-cap defense players because of its non-platform-centric focus. Looking forward, the company enjoys strong order bookings and order backlog, an improving balance sheet, and growing cash flow, besides operational improvements. Future growth will be driven by its focus on ISR unmanned systems, training, cyber security, Standard Missile-6, Patriot, Zumwalt and THAAD.
This is, however, offset by apprehensions over future growth of the U.S. defense budget, the fate of high-cost programs, risks related to key project executions and order cancellations. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.
The company is expected to release its fourth quarter and fiscal year results on January 23, 2012. The Zacks Consensus Estimates for fourth quarter 2011 and fiscal year 2011 are currently at $1.35 per share and $5.05 per share, respectively.
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. Some of its main competitors include The Boeing Company (BA) and Lockheed Martin Corporation (LMT”>LMT).
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