Raytheon Delivers 2nd Australian Phalanx System

Waltham, Mass.-based Raytheon (NYSE: RTN  ) has made the second installment on a three-part contract to protect the Royal Australian Navy from bad guys with cruise missiles.

On Friday, Raytheon announced the delivery of its second of three ordered Phalanx Block 1B Close-In Weapon Systems to Australia. The first gun was delivered for installation aboard the new Air Warfare Destroyer (AWD) Hobart last year. This current gun will be installed aboard the AWD Brisbane. The third and final gun will be delivered for installation aboard the RAN's third AWD, the Sydney, next year.

For Raytheon, that will mark completion of its contract to supply the RAN with three Phalanxes for a total purchase price of $35 million -- a little under $12 million apiece. That's a better price than Raytheon gets when it sells the system to U.S. buyers. In 2007, for example, the U.S. Navy and Army ordered up 46 Phalanxes at an average purchase price of about $5 million per gun. On the other hand, last year, the United Kingdom had to pay closer to $13 million apiece when it ordered five Phalanxes.

Raytheon describes the Phalanx as a "rapid-fire, computer-controlled radar, and 20 mm gun system that automatically acquires, tracks, and destroys enemy threats that have penetrated all other ship defense systems." Thus, Raytheon's gun system constitutes the last line of defense between a missile and its prey. More than 890 Phalanx systems have been built and deployed in the navies of 25 nations around the globe.


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