Raytheon (RTN) Wins Air Force Radar Contract

Shares of the Raytheon Company (RTN) closed down -0.78 or -0.79 percent to $98.40 Monday on a weak day for the general market yesterday. Shares are trading +0.75 higher in this morning's premarket after the Pentagon announced on Monday that Raytheon had beat out two other bidders in the development of a new radar system for the U.S. Air Force. The deal, according to analysts has a potential worth of $1.6 billion over time.

Waltham, Massachusetts based Raytheon Company was established in 1922 and establishing itself under its current name in 1959.
The company is one of the world's largest defense contractors, the company's e products include weapons systems and commercial and military electronics, as well as being the world's largest producer of guided missiles. Raytheon is the fifth largest military contractor in the world and the fourth largest in the United States. With operations spanning the globe, Raytheon employs 63,000 people and had revenue of $23.71 billion in 2013.

Raytheon was selected by the U.S. Air Force over Lockheed Martin (LMT) and Northrop Grumman (NOC) to develop the Three-Dimensional Expeditionary Long Range Radar or 3DELRR, a ground based mobile radar system designed to detect drones and cruise missiles. The contract will be shared with DeWitt, New York based subcontractor, Saab Defense.

After the initial $19.5 million contract, the Air Force plans to authorize an initial $71.8 million to complete the development of the 3DELRR and for the production of six units for immediate deployment. The contract will complete the initial development, engineering and manufacturing phase of the project.

The Air Force will then expand the project to 35 radar systems, which is expected to attract foreign interest from U.S. allies that prefer operating the same radar systems as the U.S. Also, the U.S. Marine Corps is also considering the 3DELRR radar system to replace the system it currently uses for detecting ballistic missiles.

Three Dealer, as the system is colloquially referred to, will serve as the U.S. Air Force's primary ground-based, long-range radar, replacing the AN/TPS-75 air search radar that was originally developed by General Electric and which eventually became a part of Lockheed Martin.

David Gulla, Vice President, Global Integrated Sensors at Raytheon Integrated Defense Systems said in a press release that, "By choosing Raytheon's 3DELRR solution, the Air Force is purchasing an affordable, exportable radar . He continued, "Raytheon's 3DELRR design is interoperable with coalition systems and capable of meeting the requirements of many international customers."

Andrew Hajek, Raytheon's 3DELRR Program Director said, "As the U.S. and other countries look to replace aging battlefield radars with low-cost yet cutting edge and highly capable systems, Raytheon's 3DELRR can meet that growing demand .

Raytheon stock is at the upper end of its yearly range, while the radar contract is minor compared to some of Raytheon's larger contracts, the deal marks the beginning of what could extend to selling systems to other sectors of the armed forces as well as foreign nations.

Other News About Raytheon
Raytheon Company Rushes to Restock Israel's Iron Dome
Israel needs to restock missiles after 50 days of attacks by Hamas.
Raytheon Gets Navy Contract for Tomahawk Cruise Missiles
Raytheon awarded $251 million contract by the Navy.

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Published on Oct 7, 2014
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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