Defense contractor Raytheon Company (RTN) won a U.S. Navy contract for AGM-154C-1 Joint Standoff Weapons (“JSOW”). The contract, valued at $80.5 million, is for 200 units of Full Rate Production Lot 9 of JSOW.
Raytheon-designed JSOW is a family of low-cost, air-to-ground 1000-lb. glide bomb that can travel as far as 78 miles to hit a target. For this, it employs an integrated Global Positioning System (“GPS”)/ /Inertial Navigation System and terminal imaging infrared seeker, directing the weapon to the target. Raytheon expects to complete work on this order by Jul 2015.
Raytheon is one of the best-positioned companies among the large-cap defense players, such as, Northrop Grumman Corp. (NOC), Lockheed Martin Corporation (LMT) and General Dynamics Corporation (GD).
In fact, Raytheon 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. Future growth will be driven by its focus on Intelligence, Surveillance and Reconnaissance unmanned systems, training, cyber security, Standard Missile-6, Patriot, Zumwalt and Terminal High Altitude Area Defense.
Recently, Raytheon received an international order worth $106 million for its Paveway II smart bombs. Per this direct commercial sale contract, the company will provide Paveway kits for both GBU-12 (500lb) and GBU-58 (250lb) guided bombs.
Of late, domestic contract flows for Raytheon have been low-priced owing to the defense budget austerity in the U.S. We believe the continued cutbacks in the sector will weigh on the company’s profitability. However, strong international orders will offer a relief to Raytheon’s business.
Raytheon at present carries a Zacks Rank #3 (Hold). Based in Waltham, Mass., Raytheon Company, together with its subsidiaries, provides electronics, mission systems integration, and other capabilities to the U.S. and internationally.
More From Zacks.com
- Military & Defense
- Raytheon Company
- Global Positioning System
- Inertial Navigation System