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Raytheon (RTN) Clinches $62M Deal to Support AMRAAM Program
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Raytheon Company’s Missile Systems (MS) business division recently secured a $62-million cost-plus-incentive-fee option contract for the Advanced Medium Range Air to Air Missile (AMRAAM) program.
The modification program provides for the exercise of options with regard to Phase 5 activities and foreign military sales (FMS) drawings for the form, fit and function refresh of the AMRAAM guidance section. The contract was awarded by the Air Force Life Cycle Management Center, Eglin Air Force Base, Florida.
Details of the Deal
Work related to the deal will be primarily executed in Tucson, AZ (the United States). The entire task with respect to the deal is expected to get completed by Dec 21, 2020.
Raytheon’s contract will involve FMS to Norway, Turkey, Japan, Romania and Australia. The company has received $6.7 million for FMS fund at the time of contract awarded.
A Brief Note on AMRAAM
Raytheon’s AMRAAM is the world's most sophisticated air dominance weapon with operational flexibility during air-to-air and surface-launch engagements. Its capabilities have been fully demonstrated in more than 4,200 test shots and 10 air-to-air combat victories.
Per Raytheon, in the air-to-air role, no other missile compares with the AMRAAM‘s capacity. The weapon's advanced active guidance section provides aircrew with a high degree of combat flexibility and lethality. This weapon has been procured by as many as 37 nations including the United States. It has been installed in top-quality military jets like F-16, F-15, F/A-18, F-22, Typhoon, Gripen, Tornado and Harrier.
Its latest version, the AMRAAM-Extended Range missile, is a new, ground-launched solution that will intercept targets at longer distances and higher altitudes.
Importance of FMS Deals
As one of the top missile makers across the globe, Raytheon’s foreign military contracts continue to act as a key catalyst. Internationally, the company’s bookings comprised 21% of the total second-quarter bookings while sales accounted for 31% of its total sales.
Particularly, increasing geopolitical tensions across Europe, Asia Pacific and the Middle East have been driving demand for Raytheon’s missile systems in the international market with PATRIOT being the center of attraction. The latest deal is a further testament to the same.
In the recent past, Raytheon witnessed a handful of FMS contracts for its PATRIOT missile system. In August 2018, the Swedish government signed a $1-billion agreement with the U.S. administration to purchase Raytheon’s Patriot missiles. Also, earlier in March, Poland signed a Letter of Offer and Acceptance (LOA) agreement with the U.S. government to procure two Patriot System Batteries along with fire units for $4.75 billion. Such notable contract wins including the latest one, should enable Raytheon to strengthen its foothold in the international defense market.
Looking Ahead
Per Markets and Markets research firm, the rocket and missile market is projected to see a CAGR of 4.74%, rising from $55.5 billion in 2017 to $70 billion in 2022. Such growth can be attributed to increasing geopolitical conflicts, war and terrorism, significantly driving demand for rockets and missiles on a global scale. Given this massive expansion opportunity and frequent contract wins from Pentagon for its missile systems including the latest one, Raytheon will most likely be able to enhance its market share in the aerospace and defense industry.
Price Movement
Raytheon’s stock has inched up 1.5% in the past 12 months compared with the industry’s growth of 7.2%.
Zacks Rank & Other Key Picks
Raytheon currently carries a Zacks Rank #2 (Buy). A few other top-ranked stocks in the same industry are Curtiss-Wright Corporation (CW - Free Report) , Heico Corporation (HEI - Free Report) and Transdigm Group Incorporated (TDG - Free Report) . While Curtiss-Wright sports a Zacks Rank #1 (Strong Buy), Heico Corporation and Transdigm Group carry a Zacks Rank 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Curtiss-Wright pulled off an average earnings surprise of 22.27% for the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings has moved 0.2% north to $6.16 in the last 60 days.
Heico came up with an average beat of 2.15% in the previous four quarters. The Zacks Consensus Estimate for 2018 earnings has been raised 2.7% to $1.89 over the past 60 days.
Transdigm Group delivered an average positive surprise of 0.1% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has been revised 0.1% upward to $17.65 in the last 60 days.
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Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Raytheon (RTN) Clinches $62M Deal to Support AMRAAM Program
Raytheon Company’s Missile Systems (MS) business division recently secured a $62-million cost-plus-incentive-fee option contract for the Advanced Medium Range Air to Air Missile (AMRAAM) program.
The modification program provides for the exercise of options with regard to Phase 5 activities and foreign military sales (FMS) drawings for the form, fit and function refresh of the AMRAAM guidance section. The contract was awarded by the Air Force Life Cycle Management Center, Eglin Air Force Base, Florida.
Details of the Deal
Work related to the deal will be primarily executed in Tucson, AZ (the United States). The entire task with respect to the deal is expected to get completed by Dec 21, 2020.
Raytheon’s contract will involve FMS to Norway, Turkey, Japan, Romania and Australia. The company has received $6.7 million for FMS fund at the time of contract awarded.
A Brief Note on AMRAAM
Raytheon’s AMRAAM is the world's most sophisticated air dominance weapon with operational flexibility during air-to-air and surface-launch engagements. Its capabilities have been fully demonstrated in more than 4,200 test shots and 10 air-to-air combat victories.
Per Raytheon, in the air-to-air role, no other missile compares with the AMRAAM‘s capacity. The weapon's advanced active guidance section provides aircrew with a high degree of combat flexibility and lethality. This weapon has been procured by as many as 37 nations including the United States. It has been installed in top-quality military jets like F-16, F-15, F/A-18, F-22, Typhoon, Gripen, Tornado and Harrier.
Its latest version, the AMRAAM-Extended Range missile, is a new, ground-launched solution that will intercept targets at longer distances and higher altitudes.
Importance of FMS Deals
As one of the top missile makers across the globe, Raytheon’s foreign military contracts continue to act as a key catalyst. Internationally, the company’s bookings comprised 21% of the total second-quarter bookings while sales accounted for 31% of its total sales.
Particularly, increasing geopolitical tensions across Europe, Asia Pacific and the Middle East have been driving demand for Raytheon’s missile systems in the international market with PATRIOT being the center of attraction. The latest deal is a further testament to the same.
In the recent past, Raytheon witnessed a handful of FMS contracts for its PATRIOT missile system. In August 2018, the Swedish government signed a $1-billion agreement with the U.S. administration to purchase Raytheon’s Patriot missiles. Also, earlier in March, Poland signed a Letter of Offer and Acceptance (LOA) agreement with the U.S. government to procure two Patriot System Batteries along with fire units for $4.75 billion. Such notable contract wins including the latest one, should enable Raytheon to strengthen its foothold in the international defense market.
Looking Ahead
Per Markets and Markets research firm, the rocket and missile market is projected to see a CAGR of 4.74%, rising from $55.5 billion in 2017 to $70 billion in 2022. Such growth can be attributed to increasing geopolitical conflicts, war and terrorism, significantly driving demand for rockets and missiles on a global scale. Given this massive expansion opportunity and frequent contract wins from Pentagon for its missile systems including the latest one, Raytheon will most likely be able to enhance its market share in the aerospace and defense industry.
Price Movement
Raytheon’s stock has inched up 1.5% in the past 12 months compared with the industry’s growth of 7.2%.
Zacks Rank & Other Key Picks
Raytheon currently carries a Zacks Rank #2 (Buy). A few other top-ranked stocks in the same industry are Curtiss-Wright Corporation (CW - Free Report) , Heico Corporation (HEI - Free Report) and Transdigm Group Incorporated (TDG - Free Report) . While Curtiss-Wright sports a Zacks Rank #1 (Strong Buy), Heico Corporation and Transdigm Group carry a Zacks Rank 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Curtiss-Wright pulled off an average earnings surprise of 22.27% for the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings has moved 0.2% north to $6.16 in the last 60 days.
Heico came up with an average beat of 2.15% in the previous four quarters. The Zacks Consensus Estimate for 2018 earnings has been raised 2.7% to $1.89 over the past 60 days.
Transdigm Group delivered an average positive surprise of 0.1% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has been revised 0.1% upward to $17.65 in the last 60 days.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>