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Tickers in this Article: RTN, XLS, NOC, BA
Raytheon Company (RTN) has won a delivery contract, worth $9.6 million, from the U.S. Department of Defense (DoD). The contract, a part of the earlier issued Basic Ordering Agreement, deals with restoration of the H-60 Multi-Spectral Targeting System (MTS) forward looking infrared turrets.

Raytheon’s Intelligence, Information and Services business will be responsible for this contract, which will take place in the company’s facilities in McKinney, Texas and Jacksonville, Florida. The deal is scheduled to be completed by May 2014.

The MTS offers dependable long-range surveillance, target attainment, tracking, range discovery and laser designation of HELLFIRE and tri-service/North Atlantic Treaty Organization’s (NATO) laser guided ammunitions. It features multiple fields of vision, electronic zoom and multimode video tracking facilities.

It is evident from past record that Raytheon has a strong relationship with the U.S. defense establishments. Raytheon has built the rapport due to its ability to meet the commitments in terms of maintaining products and services standard along with delivery timing.

Recently, Raytheon received a contract from the U.S. Naval Air Systems Command to produce an integrated multi-intelligence (Multi-INT) system to protect the warfighters positioned at the forefront.

The defense operators’ performance primarily depends on the orders coming from the national and international defense bodies. With the risk of US defense budget cuts looming large, we believe the defense companies’ attempt toward wining small ticket-size domestic and foreign orders will enable them to maintain a regular revenue flow.

Raytheon currently has a Zacks Rank #3 (Hold). However, other stocks from the sector that are presently performing well include Exelis, Inc. (XLS) with a Zacks Rank #1 (Strong Buy), and The Boeing Company (BA) and Northrop Grumman Corporation (NOC) with a Zacks Rank #2 (Buy).

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