Raytheon Radars Assist US Navy
Defense contractor Raytheon Company (RTN) announced that the U.S. Navy has purchased two more digital-based radar systems. The new radar systems are scheduled to be installed at military bases in New River, North Carolina, and Quantico, Virginia. The new radars will replace the old analog-based air traffic control system at these bases.
The U.S. Navy continuously looks to upgrade its air traffic control systems. The replacement of analog radars with digital-based technology is part of the U.S. National Airspace System (:NAS) Modernization Program. Raytheon’s Digital Airport Surveillance Radar (:DASR) ASR-11 has the desired qualities and has already been installed in more than 130 sites globally.
The ASR-11 system has two electronic subsystems, a primary and a secondary surveillance radar. The primary surveillance radar has coverage capacity up to 60 miles while the secondary surveillance radar has coverage capacity up to 120 miles. These radars aid the air traffic controller with improved aircraft detection and better weather display. This enables the controller to maintain safety in the airspace, which is becoming busier every passing day.
These radars are designed to be fully operational in unattended operation using redundant subsystems. The radars have built-in test equipment and can be fully controlled and monitored from multiple locations. These factors allow the operators to provide critical air traffic services when the existing infrastructure fails to provide support.
Raytheon continues to develop its radar system technology and has an edge over competition. The company continues to receive defense contracts. In March 2012, Raytheon was awarded a $45.5 million contract by the U.S. Army for prototype development of Ku Band Multi-Function RF System (:MFRFS) Sense and Warn (S&W) radars. This agreement is an extension of the U.S. Army's Future Combat Systems (FCS) program.
Raytheon with a multi-sector exposure enjoys a strong balance sheet and cash flow. Not unlike other operators, Raytheon, too, derives the majority of revenues from U.S. defense spending. Consequently, any cutback in the defense budget would affect the financials of the company.
The company is scheduled to release its first quarter 2012 earnings on April 26, 2012. The Zacks Consensus Estimates for revenue and earnings per share for the quarter are $5.77 billion and $1.16, respectively.
Raytheon Company presently retains a short-term Zacks #4 Rank, which translates into a Sell rating. A similar bearish sentiment rings true for its peer Northrop Grumman Corporation (NOC), another Zacks #4 Ranked company.
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.
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