Raytheon, Boeing, Lockheed Win DoD Contracts - Analyst Blog
April 10 2014 - 3:45PM
Zacks
With the passage of Obama's $1.1
trillion Omnibus spending measure in Jan 2014, Pentagon seems to be
back strengthening its artillery. The U.S. Department of Defense
(DoD) granted a total of eight contracts on Apr 9, 2014.
Among the winners, Exelis Inc. (XLS),
General Dynamics Corp. (GD), Harris
Corp. (HRS) and Thales Defense & Security together won
a $988 million contract for SRW Appliqué Radio Systems.
Again, Pentagon provided funds to Thales-Raytheon Systems Company
LLC for using the option to acquire Sentinel Mode 5 Identification
Friend or Foe kits and spares. The contract is worth $17.7 million
and is slated for completion on Sep 30, 2016. Thales-Raytheon
Systems Company is a 50:50 joint venture between Raytheon
Co. (RTN) and Thales Group.
Separately, Raytheon’s Integrated Defense Systems division has also
been awarded a $17.0 million firm-fixed-price delivery contract.
The contract was for the procurement and fabrication of AN/SPY-1
Radar Transmitter Multi-Mission Signal Processor Capability
ordnance alteration kits, RF Coherent Combiner ordnance alteration
kits, Kill Assessment System ordnance alteration kits, High Volt
Power Supply Sidewall Capacitor ordnance alteration kits, 10 kW
Traveling Wave Tube monitoring circuit ordnance alteration kits,
Aegis Weapon System Modernization requirements for Japan, and
installation and test services in support of the AEGIS
modernization effort. Work will likely be completed by Apr
2016.
Defense major, The Boeing Co. (BA) also received
an $8.9 million modification contract from the defense department
for a CH-47F cargo helicopter. The contract – expected to be
completed by Dec 31, 2020 – calls for Boeing to provide additional
production lot 13 long lead funding and additional production lot
12 over and above funding.
Pentagon’s prime contractor, Lockheed Martin Corp.
(LMT), also did not fail to collect funds from the daily funding
list of the DoD. Though a small award, the company received an $8.5
million modification contract for securing options for Low Cost
Conformal Array production units, spare modules and spare outboard
electronics canisters. Work on this contract is expected to be
completed by Feb 2016.
Though the aerospace and defense industry is vulnerable to defense
budget cuts and sequestration, the defense companies have
diversified their businesses and are not lacking in DoD
contracts.
Apart from small pickups from DoD contracts, these companies are
also clinching deals of higher value. Recently, Boeing won a
sizeable $1.16 billion contract modification to supply the U.S.
Army with AH-64E Apache helicopters.
Raytheon and General Dynamics stocks, with a Zacks Rank #2 (Buy),
are worth accumulating now.
BOEING CO (BA): Free Stock Analysis Report
GENL DYNAMICS (GD): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis Report
RAYTHEON CO (RTN): Free Stock Analysis Report
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