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Raytheon Company’s (RTN - Analyst Report) subsidiary Raytheon BBN Technologies has entered into an agreement worth $16 million, funded by the Defense Advanced Research Projects Agency (“DARPA”) and the U.S. Air Force Research Laboratory (“AFRL”). This contract comes under the U.S. Department of Defense’s (“DoD”) Deep Exploration and Filter of Text (“DEFT”) program.

The DoD professionals gather and route numerous data from a wide range of national as well as international sources to form and review its future strategies, and implement those in the mission. DARPA sets up the DEFT program to connect and improve the natural-language processing (“NLP”) technology. This program enables the DoD to improve its filtering capacity to locate operationally important information and send alerts to the concerned analysts.

Currently, rise in international terror activities are a vital threat for the human civilization and in most of the cases the terrorists target innocent civilians. Most of the countries are improving strength of their arsenals as well as intelligence infrastructures to counter this challenge. 

Like other countries, the U.S. is also actively contributing to demolish global terrorism. They spend substantial amount for upgrading their overall defense systems including foreign language analysis mechanisms as well as data encryption processes.

Raytheon’s decade-old expertise in speech and language technologies enables it to get federal contracts backed by the DoD for improving language identification and filter tools. Under the DARPA and AFRL’s support, Raytheon manufactures new devices to examine texts and encode messages. In addition, it creates new methods for deducing meanings, finding out links and detecting anomalies in texts. Raytheon also develops apparatus to assimilate new information into existing large data-store. We believe increase in demand on language and speech detection tools will enable the company to improve its financial performance. 

We view Raytheon as a well-positioned organization among the large defense players due to its non-platform-centric focus, as well as its strong order bookings of $18.6 billion and order backlog of approximately $35 billion at the end of the first nine months of 2012.

However, these positives may to some extent mitigate by factors like fate of high-cost programs related to chances over rise in future U.S. defense budget cut backs, and risks related to postponements and cancellations of key projects.
Waltham, Massachusetts-based Raytheon Company is a technology and innovation leader specializing in defense, homeland security and other government markets throughout the world.

With a market capitalization of $18.72 billion, the company has 71,000 full-time employees. Both Raytheon and one of its peers L-3 Communications Holdings Inc. (LLL - Analyst Report) currently have a short-term Zacks #3 Rank (Hold rating).

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