Raytheon’s Integrated Defense Systems recently has won a $212.6 million contract to provide upgrades to the Patriot missile system purchased by US allies.
Raytheon will provide additional engineering services for Patriot radar systems to Germany, Greece, Israel, Japan, Saudi Arabia, South Korea, Kuwait, the Netherlands, Spain, Taiwan and Ukraine.
The work on this contract is slated for completion by Jan 31, 2016, Zack.com reported on Friday.
Patriot is a long-range, high-altitude, all-weather system developed to counter threats from tactical ballistic missiles, cruise missiles and advanced fighter aircraft. This missile defense system was successfully used during the 1991 Gulf War and the Iraqi War.
For defense majors looking to battle sequestration woes with minimum losses, foreign military sales (“FMS”) remain the key tool for boosting their top line. Raytheon experienced healthy demand for its products, particularly from foreign customers in 2014.
The company has been witnessing continuous growth in its international sales over the past few years. In 2014, international sales accounted for 29% of the total net sales. Rising demand from the Gulf countries as well as the Asia-Pacific region will likely be the company’s key revenue driver.
Of late, Qatar has been reinforcing its defense in light of the growing threat from Iran. With Qatar involved in improving security, Raytheon stands to make huge gains. The company is expected to complete the contracted work by Apr 30, 2019.
Raytheon struggled to register new bookings in the fourth quarter that stood at $7,109 million compared with $7,517 million in the year-ago period, reflecting a 5.4% decline. Total backlog at the end of 2014 was $33.57 billion, down 0.3% year over year.
Raytheon’s stock closed at $110.74 Thursday, representing a year-to-date return of about 2.38%. In comparison, the S&P 500 jumped 3.12% over the corresponding time frame.