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Raytheon (RTX) Wins $5.5B Contract to Support F117 Engines
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Raytheon Technologies Corp.’s (RTX - Free Report) business unit, Pratt & Whitney, recently secured a modification contract involving the F117 engine. The Air Force Life Cycle Management Center, Tinker AFB, OK, has awarded the deal.
Valued at $5.5 billion, per this contract, Raytheon will provide sustainment support services for the F117 engine. The work is scheduled to be completed by Sep 30, 2027.
Importance of the F117 Engine
Pratt & Whitney’s F117 is the exclusive power for the U.S. Air Force’s advanced transport, the C-17 Globemaster III strategic transport aircraft. F117 engines are equipped with a directed-flow thrust reverser capable of being deployed in flight.
Its reduced temperature configuration uses technical and material advancements, such as second-generation single-crystal turbine materials, improved cooling management and thermal barrier coatings to lower operating temperatures. These enhancements contribute to F117’s excellent reliability, durability and long time on wing.
Buoyed by such remarkable features, one may expect F117 to continue to serve and power the C-17 Globemaster III, which should result in RTX witnessing a strong inflow of orders and support services contracts, like the latest one. This must bolster Raytheon’s revenues from the Pratt & Whitney business unit.
Growth Prospects
Nations are continuously strengthening their warfare and defense capabilities. In this context, warfare activities like effective airlift missions along with any kind of humanitarian aid or an overnight combat airdrop in an unsecured location that forms part of military abilities can only be carried out through an effective aircraft driven by a powerful engine.
Per the reports from Dataintelo, the global military aircraft engine market is expected to witness a CAGR of 5.3% from 2022 to 2030. This unfolds huge opportunities for Pratt & Whitney as it is a forerunner in designing, manufacturing and servicing aircraft engines and auxiliary power units.
Pratt & Whitney-manufactured engines power a series of military aircraft that enjoy strong demand in the combat aircraft market and thus should benefit RTX. Some of them are discussed below:
Boeing (BA - Free Report) : Its B-52 bomber jet continues to be a critical contributor to the U.S. National Security Strategy and is powered by Pratt & Whitney’s TF33 engine. Another aircraft of the company powered by RTX’s TF33 engine is the E-3 Airborne Warning and Control Systems aircraft.
Boeing has a long-term earnings growth rate of 4%. Its investors have gained 51% in the past year.
Lockheed Martin (LMT - Free Report) : Pratt & Whitney’s F135, the most powerful and most advanced fighter engine ever produced, powers LMT’s F35 aircraft. The stealth aircraft enjoys strong demand worldwide, which propels the demand for F135 engines and benefits Raytheon.
Lockheed Martin’s long-term earnings growth rate is 6.2%. Shares of LMT have returned 6.2% value to investors in the past year.
Price Movement
In the past month, shares of Raytheon Technologies have increased 2.3% compared with the industry’s growth of 6.4%.
The Zacks Consensus Estimate for Spire’s 2023 sales suggests a growth rate of 32.9% from the prior-year reported figure. The Zacks Consensus Estimate for Spire’s 2024 sales calls for a growth rate of 34.3% from the prior-year estimated figure.
The company delivered an earnings surprise of 16.67% in the last reported quarter. SPIR has a four-quarter average earnings surprise of 10.37%.
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Raytheon (RTX) Wins $5.5B Contract to Support F117 Engines
Raytheon Technologies Corp.’s (RTX - Free Report) business unit, Pratt & Whitney, recently secured a modification contract involving the F117 engine. The Air Force Life Cycle Management Center, Tinker AFB, OK, has awarded the deal.
Valued at $5.5 billion, per this contract, Raytheon will provide sustainment support services for the F117 engine. The work is scheduled to be completed by Sep 30, 2027.
Importance of the F117 Engine
Pratt & Whitney’s F117 is the exclusive power for the U.S. Air Force’s advanced transport, the C-17 Globemaster III strategic transport aircraft. F117 engines are equipped with a directed-flow thrust reverser capable of being deployed in flight.
Its reduced temperature configuration uses technical and material advancements, such as second-generation single-crystal turbine materials, improved cooling management and thermal barrier coatings to lower operating temperatures. These enhancements contribute to F117’s excellent reliability, durability and long time on wing.
Buoyed by such remarkable features, one may expect F117 to continue to serve and power the C-17 Globemaster III, which should result in RTX witnessing a strong inflow of orders and support services contracts, like the latest one. This must bolster Raytheon’s revenues from the Pratt & Whitney business unit.
Growth Prospects
Nations are continuously strengthening their warfare and defense capabilities. In this context, warfare activities like effective airlift missions along with any kind of humanitarian aid or an overnight combat airdrop in an unsecured location that forms part of military abilities can only be carried out through an effective aircraft driven by a powerful engine.
Per the reports from Dataintelo, the global military aircraft engine market is expected to witness a CAGR of 5.3% from 2022 to 2030. This unfolds huge opportunities for Pratt & Whitney as it is a forerunner in designing, manufacturing and servicing aircraft engines and auxiliary power units.
Pratt & Whitney-manufactured engines power a series of military aircraft that enjoy strong demand in the combat aircraft market and thus should benefit RTX. Some of them are discussed below:
Boeing (BA - Free Report) : Its B-52 bomber jet continues to be a critical contributor to the U.S. National Security Strategy and is powered by Pratt & Whitney’s TF33 engine. Another aircraft of the company powered by RTX’s TF33 engine is the E-3 Airborne Warning and Control Systems aircraft.
Boeing has a long-term earnings growth rate of 4%. Its investors have gained 51% in the past year.
Lockheed Martin (LMT - Free Report) : Pratt & Whitney’s F135, the most powerful and most advanced fighter engine ever produced, powers LMT’s F35 aircraft. The stealth aircraft enjoys strong demand worldwide, which propels the demand for F135 engines and benefits Raytheon.
Lockheed Martin’s long-term earnings growth rate is 6.2%. Shares of LMT have returned 6.2% value to investors in the past year.
Price Movement
In the past month, shares of Raytheon Technologies have increased 2.3% compared with the industry’s growth of 6.4%.
Image Source: Zacks Investment Research
Zacks Rank
Raytheon Technologies currently carries a Zacks Rank #4 (Sell). One better-ranked stock from the same industry is Spire (SPIR - Free Report) , which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Spire’s 2023 sales suggests a growth rate of 32.9% from the prior-year reported figure. The Zacks Consensus Estimate for Spire’s 2024 sales calls for a growth rate of 34.3% from the prior-year estimated figure.
The company delivered an earnings surprise of 16.67% in the last reported quarter. SPIR has a four-quarter average earnings surprise of 10.37%.