Zacks_Analysts' Blog : Raytheon Focuses on Public Safety - Analyst Blog

Defense contractor Raytheon Company (RTN) announced that its unit Network Centric Systems has combined its security solutions and civil communications businesses to form a part of a new product line namely Security and Transportation Systems (“STS”).

The STS product line will enable Raytheon to increase its footprints in public safety markets via cross-selling to commercial and government customers. This new line will also aid the company to develop novel technologies and products to cater to ever-changing consumer demands.

This new product suite will focus on two major public safety areas. The first of the focus areas, security solutions, will deal with critical infrastructure protection, including ports, airports and border protection. The second area of emphasis involves interoperable communications networks and equipment allowing first responders to communicate with one another in a crisis. The air traffic management business, which ensures safely control of more than 60% of the world's airspace, will also be a part of STS.

Network Centric Systems develops and produces mission solutions for networking, command and control, battlespace awareness, and air traffic management. The reorganization of this unit will allow Raytheon to retain its stronghold in the public safety business.

Network Centric Systems accounted for 18.3% of total revenue during the second quarter of 2011. During the quarter, this unit was able to secure a $99 million contract for Long Range Advanced Scout Surveillance Systems (LRAS3) for the U.S. Army. The business had a total backlog of $4.36 billion at quarter end.

Raytheon currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. The company competes with the likes of Lockheed Martin Corporation (LMT) and Northrop Grumman Corporation (NOC).

Based in Massachusetts, Raytheon Company deals with a diversified line of military products, including missiles, radars, sensors, surveillance and reconnaissance equipment, communication and information systems, naval systems, air traffic control systems, and technical services.