Raytheon (RTN) Wins $91M Navy Contract for F/A-18 Support

Raytheon Company RTN has won a contract from the U.S. Navy to provide retrofit components for the F/A-18 aircraft.

Details of the Contract

The contract is valued at $90.8 million. Per the terms, Raytheon will offer supplies and services including 210 Configuration D retrofit components − four Configuration D validation and verification kits; and 206 Configuration D retrofit component kits forming part of three engineering change proposals.

Work is scheduled to be completed by Oct 2019. Majority of the work will be carried out in Forest, MS, while the rest will be executed in Andover, MA; and El Segundo, CA. The contract will use fiscal 2016 and 2017 aircraft procurement (Navy) funds.

A Brief Note on F/A-18

F/A-18 Super Hornet is a twin-engine, supersonic, all weather multirole fighter jet - manufactured by aerospace giant - The Boeing Company BA. It is the U.S. Navy’s primary strike and air superiority aircraft. The jet is capable of landing and taking off from an aircraft carrier. F/A 18E is a single-seat variant of the Super Hornet, which is about 25% larger than its predecessor - the F/A-18C/D, but comparatively contains 42% lesser structural parts.

Raytheon provides APG-79 AESA radar systems for Super Hornets, which optimizes situational awareness and provides superior air-to-air and air-to-surface capability. For the F/A-18 model, the company’s combat-proven AN/ALE-50 Towed Decoy System offers protection from surface-to-air and air-to-air missile attacks.

Why Raytheon?

Raytheon is one of the best-positioned companies among large-cap defense players due to its non-platform-centric focus. Moreover, the company has been enjoying a steady stream of sumptuous contracts from government establishments. Recently, its business unit, Missile Systems, has won a contract from the U.S. Navy to procure full-rate production requirements and spares for fiscal 2017 Standard Missile-2 (SM-2). The contract is valued at $617.6 million.

Earlier in April, Raytheon won a modification contract worth $199.8 million from the U.S. Navy to procure 317 of the 17th Lot of AIM-9X Block II missiles.

In February, Raytheon secured a FMS contract worth $1.07 billion from the U.S. Air Force to provide an early warning radar system to the Qatar government. Additionally, it won a FMS contract valued at $202.2 million from the U.S. Army to provide engineering services for the PATRIOT weapon systems program in the same month.

Price Movement

Raytheon’s stock was up about 13.5% on a year-to-date basis, outperforming the Zacks categorized Aerospace-Defense Equipment industry’s gain of 8.9%. This could be because of rising demand for its defense equipments from MENA or the Middle East and North Africa region, and growth in FMS contracts. Additionally, the company poses strong competition to its peers including Ducommun Incorporated DCO and Triumph Group, Inc. TGI.

Zacks Rank

Raytheon currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Click for Free Boeing Company (The) (BA) Stock Analysis Report >>
 
Click for Free Triumph Group, Inc. (TGI) Stock Analysis Report >>
 
Click for Free Ducommun Incorporated (DCO) Stock Analysis Report >>
 
Click for Free Raytheon Company (RTN) Stock Analysis Report >>
 
To read this article on Zacks.com click here.
 
Zacks Investment Research