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Threats of sequestration and budget cuts notwithstanding, Raytheon Co. (RTN - Analyst Report) has gained 2.5% in the past one month. However, the budget environment is indeed tenuous reflecting on daily trading. The stock inched down 1.4% on Sep 30 to end the day at $77.07 a share.

Recently, Raytheon won a $243.5 million contract from the Pentagon to build 89 new Standard Missile 6 (SM-6) Block I All Up Rounds for the U.S. Navy. The contract, which runs through Mar 2016, also includes required spare parts and containers.

The SM-6 will facilitate U.S. Navy sailors and their vessels with extended range protection against fixed- and rotary-wing aircraft, unmanned aerial vehicles and cruise missiles as a part of the Naval Integrated Fire Control - Counter Air (NIFC-CA) mission area.

Given the declining trend in U.S. defense spending, Raytheon is considered as one of the best-positioned companies among the large-cap defense players due to its non-platform-centric focus. The president's defense budget for FY14 would maintain or augment funding for most of Raytheon’s biggest programs, which include the Standard Missile-3 (SM-3) missile interceptor, the Advanced Medium-Range Air to Air Missile and the SM-2 and SM-6 ship defense missiles. Other programs include AIM-9X Sidewinder, Evolved SeaSparrow, Javelin anti-tank missile, Joint Standoff Weapon, Rolling Airframe Missile, Small Diameter Bomb II and Tactical Tomahawk.

Recently, the company clinched a $136.2 million contract from the Navy to remanufacture, overhaul and upgrade 19 Phalanx Close-in Weapon Systems and produce four SeaRAM Anti-ship Missile Defense Systems.

The company also remains proactive in picking up international contracts besides securing sizeable domestic contracts. Last month, Raytheon debuted with its first border security contract in Southeast Asia by receiving a Defense Threat Reduction Agency maritime deal from the Philippines government.

Currently, Raytheon carries a Zacks Rank #2 (Buy). Other well-placed defense operators include Lockheed Martin Corp. (LMT - Analyst Report), Northrop Grumman Corp. (NOC - Analyst Report) and Alliant Techsystems Inc. (ATK - Analyst Report). While Alliant Techsystems sports a Zacks Rank #1 (Strong Buy), Northrop and Lockheed Martin hold a Zacks Rank #2 (Buy).

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