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Raytheon Clinches $110M Navy Contract for Radar Program
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Raytheon Company’s unit, Integrated Defense Systems, has won a modification contract from the U.S. Navy for the Air and Missile Defense Radar Program (AMDR) S-Band Radar (ADMR-S) and the Radar Suite Controller (RSC).
Details of the Contract
The contract is valued at $110.2 million. It was awarded by the Naval Sea Systems Command, Washington, D.C.
Per the contract, Raytheon will exercise an option for the fiscal 2017 low-rate initial production long lead material for the contract.
Work is scheduled to be complete by Dec 2017 and will be carried out in Sudbury, MA. The contract will use fiscal 2017 shipbuilding and conversion (Navy) funds.
What is AMDR?
AMDR AN/SPY-6(V) is the next-generation integrated air and missile defense radar used by the Navy. It offers improved detection ranges, discrimination accuracy, enhanced reliability and sustainability, and lower total ownership cost over the currently used radars.
The new S-band radar will be incorporated with the X-band radar, a horizon-search radar based on existing technology; and the RSC, a new component that controls radar resources and is integrated into the ship’s combat management system.
Why Raytheon?
Raytheon has significant expertise with the AMDR and its systems have been used widely in the Navy ships for a long time now. Its technical experience has also enabled Raytheon to win a regular stream of contracts from the Navy.
Raytheon is a technology leader of the defense, homeland security and other government markets across the world. The company has been heavily investing in technological upgrades with an aim to continue providing the best-in-class security solutions to the U.S. Department of Defense. Its GaN technology, which is a long-term investment, is bringing in key contracts like the AMDR.
During the third quarter, the company won an important contract in its Naval radar area for the Enterprise Air Surveillance Radar (“EASR”). These programs will place the company advantageously to support the Navy and international customers with advanced capabilities to counter emerging threats. The EASR contract represents the prospect of more than $1 billion for the company. Moreover, Raytheon won a contract from the Missile Defense Agency to develop a process to incorporate GaN components into the existing and future TPY-2 radars. These contracts reflect that the radar system has a bright prospect in the upcoming quarters.
Price Movement
Raytheon’s stock has gained about 13.9% in the last one year, underperforming the Zacks Categorized Aerospace/Defense Equipment industry’s gain of 18.7%. This could be because Raytheon’s dependence on the U.S. government for military contracts, tough competition and political uncertainty are putting pressure on its stock price.
Raytheon has witnessed seven downward estimate revisions for the current quarter over the last 60 days. Its estimates declined 5.1% from $1.96 to $1.86.
Zacks Rank & Key Picks
Raytheon currently has a Zacks Rank #3 (Hold). A few other better-ranked stocks in the aerospace and defense space include Engility Holdings, Inc. , Northrop Grumman Corporation (NOC - Free Report) and Leidos Holdings, Inc. (LDOS - Free Report) .
On an average, Engility has delivered a positive earnings surprise of 23.19% in the trailing four quarters. The company’s 2016 earnings estimates increased 13.4% over the last 60 days. Engility sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Northrop Grumman, another Zacks Rank #1 stock, delivered a positive earnings surprise of 8.29% in the trailing four quarters. The company’s 2016 earnings estimates were up just 0.1% in the last 30 days.
Leidos Holdings carries a Zacks Rank #2 (Buy). The company’s 2016 earnings estimates increased 10.6% over the last 30 days. On an average, the company has delivered a positive earnings surprise of 12.20% in the trailing four quarters.
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Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
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Raytheon Clinches $110M Navy Contract for Radar Program
Raytheon Company’s unit, Integrated Defense Systems, has won a modification contract from the U.S. Navy for the Air and Missile Defense Radar Program (AMDR) S-Band Radar (ADMR-S) and the Radar Suite Controller (RSC).
Details of the Contract
The contract is valued at $110.2 million. It was awarded by the Naval Sea Systems Command, Washington, D.C.
Per the contract, Raytheon will exercise an option for the fiscal 2017 low-rate initial production long lead material for the contract.
Work is scheduled to be complete by Dec 2017 and will be carried out in Sudbury, MA. The contract will use fiscal 2017 shipbuilding and conversion (Navy) funds.
What is AMDR?
AMDR AN/SPY-6(V) is the next-generation integrated air and missile defense radar used by the Navy. It offers improved detection ranges, discrimination accuracy, enhanced reliability and sustainability, and lower total ownership cost over the currently used radars.
The new S-band radar will be incorporated with the X-band radar, a horizon-search radar based on existing technology; and the RSC, a new component that controls radar resources and is integrated into the ship’s combat management system.
Why Raytheon?
Raytheon has significant expertise with the AMDR and its systems have been used widely in the Navy ships for a long time now. Its technical experience has also enabled Raytheon to win a regular stream of contracts from the Navy.
Raytheon is a technology leader of the defense, homeland security and other government markets across the world. The company has been heavily investing in technological upgrades with an aim to continue providing the best-in-class security solutions to the U.S. Department of Defense. Its GaN technology, which is a long-term investment, is bringing in key contracts like the AMDR.
During the third quarter, the company won an important contract in its Naval radar area for the Enterprise Air Surveillance Radar (“EASR”). These programs will place the company advantageously to support the Navy and international customers with advanced capabilities to counter emerging threats. The EASR contract represents the prospect of more than $1 billion for the company. Moreover, Raytheon won a contract from the Missile Defense Agency to develop a process to incorporate GaN components into the existing and future TPY-2 radars. These contracts reflect that the radar system has a bright prospect in the upcoming quarters.
Price Movement
Raytheon’s stock has gained about 13.9% in the last one year, underperforming the Zacks Categorized Aerospace/Defense Equipment industry’s gain of 18.7%. This could be because Raytheon’s dependence on the U.S. government for military contracts, tough competition and political uncertainty are putting pressure on its stock price.
Raytheon has witnessed seven downward estimate revisions for the current quarter over the last 60 days. Its estimates declined 5.1% from $1.96 to $1.86.
Zacks Rank & Key Picks
Raytheon currently has a Zacks Rank #3 (Hold). A few other better-ranked stocks in the aerospace and defense space include Engility Holdings, Inc. , Northrop Grumman Corporation (NOC - Free Report) and Leidos Holdings, Inc. (LDOS - Free Report) .
On an average, Engility has delivered a positive earnings surprise of 23.19% in the trailing four quarters. The company’s 2016 earnings estimates increased 13.4% over the last 60 days. Engility sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Northrop Grumman, another Zacks Rank #1 stock, delivered a positive earnings surprise of 8.29% in the trailing four quarters. The company’s 2016 earnings estimates were up just 0.1% in the last 30 days.
Leidos Holdings carries a Zacks Rank #2 (Buy). The company’s 2016 earnings estimates increased 10.6% over the last 30 days. On an average, the company has delivered a positive earnings surprise of 12.20% in the trailing four quarters.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>