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According to media reports, Raytheon Company (RTN - Analyst Report) has received three contracts with a value of more than $105 million from the Department of Defense.

The company received a $75.9 million cost-plus-fixed-fee contract to perform Standard Missile engineering and technical services. Per the contract, the company will be responsible for research and development work, production engineering, and production proofing services of the Standard Missile. The company expects the work on the contract to be completed by Dec 2017. However, it indicated that if the task on the Standard Missile contract continues and all the options are exercised, the value of the contract would increase approximately four times to $316.5 million.

The second cost-plus-fixed-fee, firm-fixed-price contract with a value of $19.6 million was a modification contract. Per the contract, the company will perform design and engineering analysis on AIM-9X Block II Missile Systems for the U.S. Navy, the U.S. Air Force, and the government of Saudi Arabia. The company expects the project to be completed in Jun 2014.

Also, the company received a $9.8 million contract for "Plan X" mission execution software. Per the contract, the company will design and develop a runtime environment for executing cyber operations mission scripts.

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. 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.

The company is also working on reorganizing its business through segment realignment. The restructuring will help the company in streamlining its operations, increasing productivity and achieving stronger alignment with customer preferences.

These positives are, however, offset by the uncertainity related to the 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 Rank #3 (Hold).

However, stocks well positioned at the moment are Erickson Air-Crane Inc. (EAC - Snapshot Report), Wesco Aircraft Holdings, Inc. (WAIR - Snapshot Report) and Alliant Techsystems Inc. (ATK - Analyst Report). While Erickson Air-Crane carries a Zacks Rank #1 (Strong Buy), Wesco Aircraft and Alliant Techsystems hold a Zacks Rank #2 (Buy).

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