Raytheon Company ( RTN - Analyst Report ) said that it has been awarded a contract for low-rate initial production (LRIP) of active electronically scanned array (AESA) radar systems for the U.S. Air Force. The radar systems would be used in The Boeing Company’s ( BA - Analyst Report ) F-15E all-weather multi-role fighter Radar Modernization Program.

Raytheon's APG-82(V)1 AESA radar can simultaneously detect, identify and track multiple air and surface targets at longer ranges than the APG-70 radar it replaces. The system offers a substantial improvement in reliability and reduces Air Force maintenance costs. When integrated into the F-15E weapons system, the AESA radar will improve detection and tracking of enemy targets.

Raytheon is scheduled to begin delivery of the LRIP-2 radar systems in February 2014. Final delivery of the initial LRIP lot of six APG-82(V)1 radars is scheduled to be completed by that date.

Based in Waltham, Massachusetts, Raytheon Company is a technology and innovation leader specializing in defense, homeland security and other government markets throughout the world. The company provides high-tech electronics, mission systems integration and other capabilities in the areas of sensing; effects; and command, control, communications and intelligence systems, as well as a broad range of mission support services.

Raytheon is one of the best-positioned companies among the large-cap defense players due to its non-platform-centric focus, as well as its strong order bookings and order backlog of more than $33.9 billion at the end of the first half of 2012.

Raytheon plays an important role in missile defense and is ideally positioned to help the United States and its allies achieve current and future missile defense goals. Given the declining trend in the U.S. defense spending, the company is one of the best-positioned companies among the large-cap defense players.

Revenue and earnings growth continue to be driven by a strong presence in the areas of Intelligence, Surveillance and Reconnaissance; air & missile defense systems; border security; air traffic management; training and homeland security; and cyber security. Also, its non-platform centric focus insulates it from cancellation or deferral of any specific platform programs.

Looking forward, the company enjoys strong order bookings and order backlog, an improving balance sheet, and growing cash flow, besides operational improvements. Future growth will be driven by its focus on ISR unmanned systems, training, cyber security, Standard Missile-6, Patriot, Zumwalt and THAAD.

However, these positives are offset by apprehensions over 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 #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

Some of its main competitors are L-3 Communications Holdings Inc. ( LLL - Analyst Report ) and FLIR Systems Inc. ( FLIR - Analyst Report ) .