Raytheon Secures $30M Navy Deal To Support F/A18 Fighter Jet
Zacks Investment Research | Aug 13, 2019 08:19AM ET
Raytheon Company (NYSE:RTN) recently secured a $29.8-million contract for the full-rate production of 82 control, dispenser, decoy and countermeasures-integrated, multi-platform launch controllers for Boeing’s (NYSE:BA) F/A18 aircraft, under the 14th lot. The contract was awarded by the Naval Air Systems Command, Patuxent River, MD.
Majority of work related to the deal will be executed in Forrest, MS; Andover, MA; and various other locations across the United States. The entire work is expected to get completed in February 2022.
What Favors Raytheon?
Increasing geopolitical tensions across the globe have prompted nations, both developed and developing, to strengthen their defense systems manifold. With a rapid technological upgrade, identifying threats beforehand has become increasingly crucial and sensors play an essential role in that. To this end, being a prime defense contractor in the United States, Raytheon holds a significant position in the U.S. sensor systems market. The latest contract win is an example of the company’s growing market share in the U.S. defense space.
Such contract flows also boost the company’s Space and Airborne Systems (SAS) unit, which develops integrated aircraft communication and sensor systems. The segment registered annual sales growth of 13% in the second quarter of 2019. Considering the latest contract win, we can expect this unit to deliver similar top-line growth in the days ahead.
Recent Budgetary Advancements to Aid Raytheon
The fiscal 2020 defense budget, which has been approved by both the US. Senate and the U.S. House of Representatives, includes a spending plan of $57.7 billion on aircraft, reflecting a massive surge of 166% from the approved fiscal 2019 defense spending. Notably, this increased spending provision, in turn, should usher in more contracts for Raytheon for aircraft equipment and spares.
Price Performance
Shares of the company have gained 1.3% in the past six months compared with the Zacks Investment Research
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