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Raytheon Wins $200M Deal for 317 AIM-9X Block II Missiles
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Raytheon Company has won a modification contract from the U.S. Navy to procure 317 of the 17th Lot of AIM-9X Block II missiles – 107 for the Navy and 210 for the Air Force.
Details of the Contract
The contract is valued at $199.8 million. It was awarded by the Naval Air Systems Command, Patuxent River, MD.
Per the modification, Raytheon will also procure 199 Block II captive air training missiles – 77 for the Air Force; 24 for the Navy; 48 for the governments of Australia; 20 for Indonesia; 20 for the Netherlands; six for Romania and four for Poland. Apart from this, the company will also provide 15 special air training missiles – 10 for the government of Australia and five for Taiwan. Additionally, the company will provide 160 all up round containers – 81 for the Air Force; 43 for the Navy; 15 for the governments of Australia; 10 for the Netherlands; six for Indonesia; two each for Romania and Taiwan and one for Poland.
Moreover, the contract includes purchases for seven spare advanced optical target detectors – one for the Navy; two each for the Air Force and the governments of Australia; one for Indonesia and Poland, each. Furthermore, 11 spare guidance units (live battery) will be procured – two for the Navy; four for the Air Force; three for the governments of Romania and two for Indonesia; 22 spare captive air training missile guidance units – two for the Navy; six for the Air Force and 10 for the governments of Australia; two each for Indonesia and Romania; 23 guidance unit containers – 10 for the Air Force and six for the governments of Australia, five for Romania, and two for Indonesia; four spare advanced optical target detector containers – two for the governments of Australia, one each for Indonesia and Poland; one spare block I propulsion steering section and one spare block II propulsion steering section for the Air Force; and spares – one each for the Navy and Air Force; and 19 lots of spares – two each for the government of Australia and Turkey, one each for Denmark, Finland, Israel, Belgium, Netherlands, Singapore, Poland, Switzerland, Japan, Norway, Morocco, Romania, Korea, Saudi Arabia and Taiwan.
In fact, the deal covers purchasing 55.75% for the Air Force; 25.53% for the Navy; 8.72% for the governments of Australia; 2.64% for Indonesia; 2.46% for Netherlands; 1.51% for Taiwan; 1.08% for Romania; 0.67% for Poland; 0.53% for Saudi Arabia; 0.25% for Belgium; 0.23% for Turkey; 0.20% for Switzerland; 0.16% for Korea; 0.16% for Norway; 0.04% for Morocco; 0.03% for Japan; 0.01% for Denmark, Finland, Israel and Singapore each, under the Foreign Military Sales (FMS) program.
Work is scheduled to be completed by Mar 2020. Majority of the work will be carried out in Tucson, AZ; while the rest in various locations across the U.S. The contract will use fiscal 2017 missile procurement (Air Force); fiscal 2017 weapons procurement (Navy); and FMS funds.
A Brief Note on AIM-9X Block II
The AIM-9X Block II missile is an advanced version of Raytheon's AIM-9X Block I Sidewinder infrared-guided, air-to-air missile that features a lock-on-after-launch capability, redesigned fuse and a one-way forward-quarter datalink capability. Unlike the AIM-9, the AIM-9X can even be used against targets on the ground.
The Block II missile is armed with improved handling, loading, in-flight safety and enhanced ability to destroy a target. It has been equipped with new processors in the guidance section and a new fuse that has a weapon datalink, providing it with a lock-on-after-launch capability. The missile’s capabilities can be enhanced with future software updates, which will leverage the speed and increased memory capacity of new processors.
Potential for Growth
Following in the footsteps of the U.S. and its allies, other countries are working on utilizing advanced technology in their defense systems. Thus, foreign military contracts are a vital growth driver for Raytheon. Evidently, the company’s fourth-quarter international bookings comprised 38% of its total bookings. During the quarter, international sales were up 5.6%, representing 31% of total sales.
Why Raytheon?
Raytheon is one of the best-positioned companies among large-cap defense players due to its non-platform-centric focus. It has been manufacturing AIM-9X missiles for 14 years. Block I missiles have been delivered to nine U.S. allies, while the Block II is being used by over 40 nations.
Moreover, the company has been enjoying a steady stream of contracts from government establishments. In February, Raytheon secured a FMS contract, worth $1.07 billion, from the U.S. Air Force. Under the terms of the deal, the company will provide an early warning radar system to the Qatar government, which will be incorporated into the nation’s integrated air and missile defense enterprise.
Again, in the same month, Raytheon won a FMS contract from the U.S. Army to provide engineering services for the PATRIOT weapon systems program. The contract was valued at $202.2 million.
Price Movement
Raytheon’s stock gained about 22.8% in the last 12 months, outperforming the Zacks categorized Aerospace-Defense Equipment industry’s gain of 19.5%. This could be because of rising demand from MENA or the Middle East and North Africa region, and growth in FMS contracts. The company also poses strong competition to peers including Ducommun Incorporated (DCO - Free Report) , Curtiss-Wright Corporation (CW - Free Report) and Aerojet Rocketdyne Holdings, Inc. .
More Stock News: 8 Companies Verge on Apple-Like Run
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Raytheon Wins $200M Deal for 317 AIM-9X Block II Missiles
Raytheon Company has won a modification contract from the U.S. Navy to procure 317 of the 17th Lot of AIM-9X Block II missiles – 107 for the Navy and 210 for the Air Force.
Details of the Contract
The contract is valued at $199.8 million. It was awarded by the Naval Air Systems Command, Patuxent River, MD.
Per the modification, Raytheon will also procure 199 Block II captive air training missiles – 77 for the Air Force; 24 for the Navy; 48 for the governments of Australia; 20 for Indonesia; 20 for the Netherlands; six for Romania and four for Poland. Apart from this, the company will also provide 15 special air training missiles – 10 for the government of Australia and five for Taiwan. Additionally, the company will provide 160 all up round containers – 81 for the Air Force; 43 for the Navy; 15 for the governments of Australia; 10 for the Netherlands; six for Indonesia; two each for Romania and Taiwan and one for Poland.
Moreover, the contract includes purchases for seven spare advanced optical target detectors – one for the Navy; two each for the Air Force and the governments of Australia; one for Indonesia and Poland, each. Furthermore, 11 spare guidance units (live battery) will be procured – two for the Navy; four for the Air Force; three for the governments of Romania and two for Indonesia; 22 spare captive air training missile guidance units – two for the Navy; six for the Air Force and 10 for the governments of Australia; two each for Indonesia and Romania; 23 guidance unit containers – 10 for the Air Force and six for the governments of Australia, five for Romania, and two for Indonesia; four spare advanced optical target detector containers – two for the governments of Australia, one each for Indonesia and Poland; one spare block I propulsion steering section and one spare block II propulsion steering section for the Air Force; and spares – one each for the Navy and Air Force; and 19 lots of spares – two each for the government of Australia and Turkey, one each for Denmark, Finland, Israel, Belgium, Netherlands, Singapore, Poland, Switzerland, Japan, Norway, Morocco, Romania, Korea, Saudi Arabia and Taiwan.
In fact, the deal covers purchasing 55.75% for the Air Force; 25.53% for the Navy; 8.72% for the governments of Australia; 2.64% for Indonesia; 2.46% for Netherlands; 1.51% for Taiwan; 1.08% for Romania; 0.67% for Poland; 0.53% for Saudi Arabia; 0.25% for Belgium; 0.23% for Turkey; 0.20% for Switzerland; 0.16% for Korea; 0.16% for Norway; 0.04% for Morocco; 0.03% for Japan; 0.01% for Denmark, Finland, Israel and Singapore each, under the Foreign Military Sales (FMS) program.
Work is scheduled to be completed by Mar 2020. Majority of the work will be carried out in Tucson, AZ; while the rest in various locations across the U.S. The contract will use fiscal 2017 missile procurement (Air Force); fiscal 2017 weapons procurement (Navy); and FMS funds.
A Brief Note on AIM-9X Block II
The AIM-9X Block II missile is an advanced version of Raytheon's AIM-9X Block I Sidewinder infrared-guided, air-to-air missile that features a lock-on-after-launch capability, redesigned fuse and a one-way forward-quarter datalink capability. Unlike the AIM-9, the AIM-9X can even be used against targets on the ground.
The Block II missile is armed with improved handling, loading, in-flight safety and enhanced ability to destroy a target. It has been equipped with new processors in the guidance section and a new fuse that has a weapon datalink, providing it with a lock-on-after-launch capability. The missile’s capabilities can be enhanced with future software updates, which will leverage the speed and increased memory capacity of new processors.
Potential for Growth
Following in the footsteps of the U.S. and its allies, other countries are working on utilizing advanced technology in their defense systems. Thus, foreign military contracts are a vital growth driver for Raytheon. Evidently, the company’s fourth-quarter international bookings comprised 38% of its total bookings. During the quarter, international sales were up 5.6%, representing 31% of total sales.
Why Raytheon?
Raytheon is one of the best-positioned companies among large-cap defense players due to its non-platform-centric focus. It has been manufacturing AIM-9X missiles for 14 years. Block I missiles have been delivered to nine U.S. allies, while the Block II is being used by over 40 nations.
Moreover, the company has been enjoying a steady stream of contracts from government establishments. In February, Raytheon secured a FMS contract, worth $1.07 billion, from the U.S. Air Force. Under the terms of the deal, the company will provide an early warning radar system to the Qatar government, which will be incorporated into the nation’s integrated air and missile defense enterprise.
Again, in the same month, Raytheon won a FMS contract from the U.S. Army to provide engineering services for the PATRIOT weapon systems program. The contract was valued at $202.2 million.
Price Movement
Raytheon’s stock gained about 22.8% in the last 12 months, outperforming the Zacks categorized Aerospace-Defense Equipment industry’s gain of 19.5%. This could be because of rising demand from MENA or the Middle East and North Africa region, and growth in FMS contracts. The company also poses strong competition to peers including Ducommun Incorporated (DCO - Free Report) , Curtiss-Wright Corporation (CW - Free Report) and Aerojet Rocketdyne Holdings, Inc. .
Zacks Rank
Raytheon currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>