Back to top

Image: Bigstock

Raytheon (RTN) Wins $85M Deal to Supply H-60 Spare Parts

Read MoreHide Full Article

Raytheon Company recently won a delivery order for H-60 spare parts. Work related to the deal is scheduled to be over by Aug 31, 2020.

Valued at $84.7 million, the contract was awarded by the Defense Logistics Agency Aviation, Philadelphia, PA. Raytheon will execute the task for this deal at Texas. Fiscal 2018 through 2020 Navy working capital funds will be used to finance the contract.

A Brief Note on H-60

H-60 is a family of military helicopters, built by Sikorsky — a unit of defense giant Lockheed Martin (LMT - Free Report) . Popularly known as Black Hawk, this series of aircraft serve the U.S. military as well as the armed forces of 28 other countries worldwide as a tough, reliable utility helicopter.

Over the last 40 years, this aircraft has served in countless combat zones to deliver and extract troops, saved lives as a MEDEVAC or casualty evacuation platform, provided critical supplies to troops, delivered emergency supplies during natural disasters, and performed as an aerial firefighter and border patroller.

More than 4,000 Black Hawk aircraft of all types are in service worldwide today. The U.S. Army is the largest operator with 2,135 H-60 designated aircraft.

Our View

With the increase in cyber-attacks, terror threats and geopolitical instability in the past decade, a rapid rise in defense spending has been witnessed among countries worldwide to further strengthen their national security. America is also observing a solid inflow of military contracts lately.

With Raytheon being one of the top-notch defense majors in the United States, the company has been winning significant awards from the domestic as well as international customers, courtesy of its high-end, combat-proven advanced arsenal portfolio. For instance, the company won a $2.3-billionhybrid contract for providing engineering services to the Phased Array Tracking Radar Intercept on Target (PATRIOT) weapon systems program, at the end of January 2018. Last week, Raytheon won a modification deal worth $523 million for production of Advanced Medium Range Air to Air Missile’s (AMRAAM) 31st Lot.

Meanwhile the fiscal 2019 defense budget proposal aims at spending $12.9 billion for enhancements to U.S. missile defense capabilities. Notably, the budget includes an investment plan of $1.1 billion for 240 Patriot Missile Segment Enhancements. This in turn surely reflects increased growth prospects for Raytheon and we may expect the company to win more such contracts, like the latest one, from the Pentagon in the coming days.

Price Performance

Shares of Raytheon have rallied about 44.3% in a year, compared with the broader industry’s gain of 42.5%. The company’s growing demand for missile defense systems and expanding overseas business most probably have boosted this outperformance.

 

 

Zacks Rank & Stocks to Consider

Raytheon carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the same sector are Huntington Ingalls Industries (HII - Free Report) and Boeing (BA - Free Report) , each of them sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Boeing delivered an average positive earnings surprise of 20.69% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by $3.06 to $14.05 in the last 90 days.

Huntington Ingalls recorded an average positive earnings surprise of 3.85% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by $5.44 to $17.38 in the last 90 days.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>

Published in