Raytheon Company (RTN - Analyst Report) has clinched a Defense Threat Reduction Agency or DTRA contract for maritime border security in the Philippines. This marks the first border security-related contract from Southeast Asia.
Per the two-year base contract, Raytheon is responsible for designing and developing a National Coast Watch Center (NCWC), thereby integrating data from various agencies into the NCWC. The company will also install and provide training on an automatic identification system as well as radio communications for the government of the Philippines.
This contract, with an extension option, was awarded in Jul 2013 and will end on Jul 31, 2015. If all options are exercised, the contract could be worth up to $18 million.
Raytheon has worked with the DTRA − a U.S. Department of Defense unit for interdicting the movement of weapons of mass destruction (WMD) − on cooperative threat reduction operations under a number of contracts. In April, Raytheon won a three-year, $35.9 million DTRA border security agreement. Per the agreement, Raytheon is responsible for designing, developing and implementing an integrated surveillance system along sections of the Jordanian border. The company will also provide training, maintenance and repair, as well as equipment. In fact, the Jordan venture is a part of the CTR Integrating Contract (CTRIC II), from Apr 2011, in this field.
Based in Waltham, Mass., Raytheon Company is a technology and innovation leader specializing in defense, homeland security and other government markets throughout the world. Going forward, revenue and earnings growth would continue to be driven by its strong presence in the areas of Intelligence, Surveillance and Reconnaissance (ISR); air & missile defense systems; border security; air traffic management; training and homeland security; and cyber security. The company remains actively involved in a number of classified U.S. government programs, principally through its IIS and SAS business segments.
Among the large-cap defense players, Raytheon is one of the best-positioned companies. Late last month, the company reported its second quarter 2013 earnings that exceeded our expectation by 26.1% and were also above the year-ago profit level by 4.5%. The beat was driven by strong program execution and the ability of the company to match the security needs of its customers through premium quality products.
State-of-the-art technology and missiles developed by the company allow it to have a competitive edge and ensure a continuous flow of contracts from the U.S. defense department and from its global customers.
Raytheon currently holds a Zacks Rank #2 (Buy). Other defense operators also worth mentioning are Zacks Ranked #2 (Buy) Lockheed Martin Corp. (LMT - Analyst Report), Huntington Ingalls Industries, Inc. (HII - Analyst Report) and Northrop Grumman Corporation (NOC - Analyst Report).