TUCSON, Ariz. - Defense contractor Raytheon (NYSE:RTN), a business of RTX (NYSE:RTX), has been awarded a $736 million contract by the U.S. Navy to manufacture the AIM-9X SIDEWINDER missile's Block II variant. The contract aims to address hardware obsolescence and upgrade the missile to ensure enhanced performance and reliability over the long term.
The AIM-9X SIDEWINDER is recognized as the most advanced infrared-tracking, short-range missile for both air-to-air and surface-to-air engagements. The missile is designed for easy installation across a variety of modern aircraft and provides a layered defense capability, including ground-launched systems like the National Advanced Surface-to-Air Missile System (NASAMS).
Barbara Borgonovi, president of Naval Power at Raytheon, commented on the contract, stating the AIM-9X continues to be the preferred weapon for missile defense due to strong global demand. Raytheon plans to increase AIM-9X production capacity beginning with orders in the next year.
The AIM-9X is a joint program led by the U.S. Navy in partnership with the U.S. Air Force and is utilized by over 30 allied nations. The Czech Republic recently joined the roster of international users in March 2024, intending to deploy the missile on their F-35 aircraft.
Production under this new contract will be carried out at multiple locations within the United States and is expected to continue through 2029.
Raytheon, with a history of over 100 years in defense technology, provides a wide range of solutions including air and missile defense, smart weapons, and advanced sensors. RTX, the parent company, employs over 185,000 people globally and reported sales of $69 billion in 2023.
This news is based on a press release statement.
In other recent news, the U.S. State Department has approved potential military sales to India, Italy, and Romania, totaling $965 million. RTX Corp and BAE Systems (LON:BAES) emerged as principal contractors for these deals, bolstering the U.S. defense industry. Meanwhile, RTX Corp has been the focus of analysts. TD Cowen reiterated a Buy rating on RTX Corp, citing impressive third-quarter defense orders, while Deutsche Bank upgraded the company's stock from Sell to Hold, expecting third-quarter earnings per share to exceed expectations.
Furthermore, RTX Corp secured a contract from the Defense Advanced Research Projects Agency to develop ultra-wide bandgap semiconductors. The company's division, Pratt & Whitney, opened a new $255 million military engine facility in Oklahoma City, projecting to create an additional 100 full-time jobs in the next five years. In addition, the U.S. Department of State approved a potential sale of Stinger missiles to Egypt, valued at approximately $740 million, with RTX Corp as the principal contractor. These developments demonstrate the ongoing strategic partnerships and defense collaboration between the U.S. and its allies.
InvestingPro Insights
The recent $736 million contract awarded to Raytheon, a business of RTX (NYSE:RTX), for the AIM-9X SIDEWINDER missile production aligns well with the company's strong market position and financial performance. According to InvestingPro data, RTX boasts a substantial market capitalization of $164.62 billion, reflecting its significant presence in the defense industry.
An InvestingPro Tip highlights that RTX is a prominent player in the Aerospace & Defense sector, which is evident from this major contract win. The company's revenue of $72.42 billion in the last twelve months as of Q2 2024 underscores its robust operational scale, supporting its ability to undertake large-scale defense projects like the SIDEWINDER missile production.
Another relevant InvestingPro Tip indicates that RTX has maintained dividend payments for 54 consecutive years, demonstrating financial stability and commitment to shareholder returns. This long-standing dividend history may be attractive to investors looking for consistent income alongside potential growth from defense contracts.
It's worth noting that RTX's stock has shown a strong return over the last year, with a price total return of 73.3% as of the latest data. This performance could be attributed to the company's continued success in securing significant defense contracts and its solid market position.
For investors interested in a deeper analysis, InvestingPro offers 13 additional tips for RTX, providing a comprehensive view of the company's financial health and market position.
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