Raytheon Company’s (RTN - Free Report) Missile Systems (MS) business unit recently secured a $72 million contract to provide technical support for advanced medium range air to air missile (AMRAAM). Work related to the deal will be executed in Tucson, AZ.
In particular, the MS unit will offer technical services and analysis to support the AMRAAM weapon system. The deal was awarded by the Air Force Life Cycle Management Center, Eglin Air Force Base, FL, and is scheduled to be completed by Sep 30, 2025.
Attributes of AMRAAM
Raytheon’s AMRAAM is a versatile combat-proven air dominance weapon. Its capabilities have been fully demonstrated in over 4,200 test shots and 10 air-to-air combat victories. Notably, this weapon’s advanced active guidance section provides aircrew with a high degree of combat flexibility and lethality.
The AMRAAM is currently used by 37 countries across the globe, including the United States. This missile has been integrated in some of the renowned fighter jets like Boeing’s (BA - Free Report) F-15 and F/A-18, General Dynamics’ (GD - Free Report) F-16 and Lockheed Martin’s (LMT - Free Report) F-22, to name a few.
What’s Favoring Raytheon?
In recent times, missile defense has steadily emerged to play a pivotal role in a nation’s defense strategy due to increasing geo-political tensions across the globe. With regards to the United States, the nation’s latest cross-border tiffs with Russia and earlier with North Korea have prompted the U.S. government to spend copiously in missile.
As a result, Raytheon, a prominent U.S. missile maker, has been clinching significant awards for the enhancement of its missile defense systems with latest technologies and providing its end users with complex technical services. The latest acquired contact is one such example.
Such contract wins tend to boost revenue growth for the company’s MS business unit. Notably, the MS division recorded third-quarter 2019 net sales of $2,165 million, reflecting a 4% improvement from the year-ago quarter. Considering the latest deal and a few other contracts secured by the company in recent times, we may expect this segment to reflect similar top-line performance in coming days.
Furthermore, the U.S. fiscal 2019 defense budget provisioned for major war-fighting investments of $12.9 billion on missile defense. This should enable Raytheon to clinch more contracts related to missile defense systems and associated services.
In a year’s time, Raytheon has gained 23.9% compared with the industry’s 32.6% growth.
Raytheon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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