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RTX Wins a $221M Contract for Supporting F135 Propulsion System
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RTX Corporation’s (RTX - Free Report) business segment, Pratt and Whitney, recently secured a contract involving its F135 propulsion system. The award has been offered by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $221 million, the contract is expected to be completed by September 2026. Per the terms of the deal, RTX will provide material and support equipment, program administrative, labor, supplies, services, planning and unit level support equipment for F135 propulsion system.
These provisions will be made for conducting depot maintenance, non-recurring sustainment activities, and depot activations of F135 propulsion systems to support F-35 Joint Strike Fighter Program.
The contract will serve the U.S. Air Force, Navy, Marine Corps, Military Sealift Command, Foreign Military Sales (FMS) customers and non-U.S. Department for Defense participants. A major portion of the work related to this deal will be carried out in East Hartford, CT.
RTX’s Growth Prospects
Combat aircraft witnessed a surge in demand with the rapid rise in political risks and global terrorism. In this context, F-35 jets, built by America’s largest defense contractor, Lockheed Martin (LMT - Free Report) , enjoy a lucrative position in the combat aircraft arena. These jets also witness a steady flow of orders from the U.S. Army, seven international partner countries and eight FMS customers.
Lockheed has delivered 944 F-35 airplanes since the program's inception, with 421 jets in the backlog as of Jun 25, 2023. This reflects the solid demand that this jet program enjoys in the defense space, resulting in multiple order wins for both LMT and RTX. The latest contract win is a bright example of that.
The production of F-35 jets is expected to continue for several years, given the U.S. government's current inventory target of 2,456 aircraft for the Air Force, Marine Corps and Navy.
Consequently, Pratt & Whitney, which builds F-35’s engine, is likely to witness more order inflows for the F-35 engine and its propulsion system in the coming days, like the latest one. This should significantly bolster RTX’s top line.
Peer Growth
Apart from Lockheed and RTX, defense majors that stand to benefit from the expanding production rates of F-35 are:
Northrop Grumman (NOC - Free Report) : The company renders its expertise in carrier aircraft and low-observable stealth technology for the F-35 program. A pioneer in the development of manned combat aircraft, NOC has a tradition of providing technological leadership in all aspects of military aviation and aircraft.
Northrop Grumman has a long-term earnings growth rate of 4.1%. The Zacks Consensus Estimate for NOC’s 2023 sales indicates a year-over-year improvement of 5.6%.
BAE Systems (BAESY - Free Report) : This defense major’s short takeoff and vertical landing experience, along with air systems sustainment, support F-35’s combat capabilities. The company provides an electronic warfare suite for F-35, which includes fully integrated radar warning (targeting support and self-protection) to detect and defeat surface and airborne threats.
BAE Systems boasts a long-term earnings growth rate of 14%. The Zacks Consensus Estimate for BAESY’s 2023 sales indicates an increase of 33.6% from the previous year’s reported figure.
Price Movement
In the past year, shares of RTX have lost 5% compared with the industry’s decline of 8.2%.
Image: Bigstock
RTX Wins a $221M Contract for Supporting F135 Propulsion System
RTX Corporation’s (RTX - Free Report) business segment, Pratt and Whitney, recently secured a contract involving its F135 propulsion system. The award has been offered by the Naval Air Systems Command, Patuxent River, MD.
Details of the Deal
Valued at $221 million, the contract is expected to be completed by September 2026. Per the terms of the deal, RTX will provide material and support equipment, program administrative, labor, supplies, services, planning and unit level support equipment for F135 propulsion system.
These provisions will be made for conducting depot maintenance, non-recurring sustainment activities, and depot activations of F135 propulsion systems to support F-35 Joint Strike Fighter Program.
The contract will serve the U.S. Air Force, Navy, Marine Corps, Military Sealift Command, Foreign Military Sales (FMS) customers and non-U.S. Department for Defense participants. A major portion of the work related to this deal will be carried out in East Hartford, CT.
RTX’s Growth Prospects
Combat aircraft witnessed a surge in demand with the rapid rise in political risks and global terrorism. In this context, F-35 jets, built by America’s largest defense contractor, Lockheed Martin (LMT - Free Report) , enjoy a lucrative position in the combat aircraft arena. These jets also witness a steady flow of orders from the U.S. Army, seven international partner countries and eight FMS customers.
Lockheed has delivered 944 F-35 airplanes since the program's inception, with 421 jets in the backlog as of Jun 25, 2023. This reflects the solid demand that this jet program enjoys in the defense space, resulting in multiple order wins for both LMT and RTX. The latest contract win is a bright example of that.
The production of F-35 jets is expected to continue for several years, given the U.S. government's current inventory target of 2,456 aircraft for the Air Force, Marine Corps and Navy.
Consequently, Pratt & Whitney, which builds F-35’s engine, is likely to witness more order inflows for the F-35 engine and its propulsion system in the coming days, like the latest one. This should significantly bolster RTX’s top line.
Peer Growth
Apart from Lockheed and RTX, defense majors that stand to benefit from the expanding production rates of F-35 are:
Northrop Grumman (NOC - Free Report) : The company renders its expertise in carrier aircraft and low-observable stealth technology for the F-35 program. A pioneer in the development of manned combat aircraft, NOC has a tradition of providing technological leadership in all aspects of military aviation and aircraft.
Northrop Grumman has a long-term earnings growth rate of 4.1%. The Zacks Consensus Estimate for NOC’s 2023 sales indicates a year-over-year improvement of 5.6%.
BAE Systems (BAESY - Free Report) : This defense major’s short takeoff and vertical landing experience, along with air systems sustainment, support F-35’s combat capabilities. The company provides an electronic warfare suite for F-35, which includes fully integrated radar warning (targeting support and self-protection) to detect and defeat surface and airborne threats.
BAE Systems boasts a long-term earnings growth rate of 14%. The Zacks Consensus Estimate for BAESY’s 2023 sales indicates an increase of 33.6% from the previous year’s reported figure.
Price Movement
In the past year, shares of RTX have lost 5% compared with the industry’s decline of 8.2%.
Image Source: Zacks Investment Research
Zacks Rank
RTX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.