Zacks_Analysts' Blog : Raytheon Gets Air Force Contract - Analyst Blog

Raytheon Company (RTN) announced that it has received a $27.4 million contract from the U.S. Air Force Space and Missile Systems Center. Per the contract Raytheon will develop a Global Positioning System (GPS) Launch and Checkout System (LCS), which will provide early launch and checkout of GPS III satellites starting with the first GPS III launch in 2014. The LCS solution would enable GPS III satellites to launch on schedule and conduct on-orbit checkout prior to the GPS Next Generation Operational Control System delivery in 2015.

Earlier, Raytheon was awarded the prime contract to develop the GPS Next Generation Operational Control System in February 2010, with a scheduled delivery date of 2015.

Raytheon is one of the best-positioned companies among the large-cap defense players. Looking forward, the company enjoys strong order bookings and order backlog, an improving balance sheet, growing cash flow, and operational improvements.

This is, however, offset by apprehensions over future growth of the U.S. defense budget, the fate of high-cost programs, risks related to key project executions and order cancellations. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

Raytheon is slated to release its fourth quarter 2011 results on January 26, 2012. The Zacks Consensus Estimate for the reported quarter is $1.34. The estimates have not changed in the last 30 days, implying that the analysts do not see any near-term catalyst and expect the company to report in line.

Based in Massachusetts, Raytheon Company is one of the largest aerospace and defense companies in the U.S. 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. Some of its primary competitors include The Boeing Company (BA) and Lockheed Martin Corporation (LMT).