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Raytheon Lands Another SM-3 Missile Defense Contract

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On a slow day at the Pentagon's contracting office Friday, Raytheon (NYSE: RTN  ) walked away with the biggest contract on offer, by orders of magnitude.

The Department of Defense announced it has awarded Raytheon a $126 million sole-source, cost-plus-incentive-fee contract modification -- which single award made up more than half the value of the $242 million in contracts DoD handed out today. The money will be used to pay upfront for parts and components needed to manufacture 29 Standard Missile-3 Block IB missiles for the U.S. Missile Defense Agency.

The SM-3IB is a new version of Raytheon's venerable Standard surface-to-air missile, which aims to enhance the original's effectiveness with enhanced, two-color infrared target seeking, and the use of short bursts of precision propulsion to steer the missile toward incoming targets. The SM-3IB is scheduled to begin deployment in 2015, but this new contract modification will have Raytheon still collecting missile parts through at least Sept. 30, 2016.

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Rich Smith

I love things that go "boom." Sonic or otherwise, that means I tend to gravitate towards defense and aerospace stocks. But to tell the truth, over the course of a dozen years writing for The Motley Fool, I have covered -- and continue to cover -- everything from retailers to consumer goods stocks, and from tech to banks to insurers as well. Follow me on Twitter or Facebook for the most important developments in defense & aerospace news, and other great stories besides.

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11/27/2015 1:03 PM
RTN $126.79 Up +0.68 +0.54%
Raytheon Company CAPS Rating: *****