Raytheon Wins $391.5 Million TOW Missile Order

Among the recipients -- Saudi Arabia.

Jun 20, 2014 at 9:26AM

Six months after the U.S. Defense Security Cooperation Agency notified Congress of plans to sell the Kingdom of Saudi Arabia some 15,699 Tube-launched, Optically tracked Wire-guided missiles, the U.S. Department of Defense announced a defense contract modification Thursday that appears aimed at finally getting some of these missiles out the door.

The press release on the award in question, a contract modification valued at $391.5 million for defense contractor Raytheon (NYSE:RTN), states that Raytheon will supply an unspecified number of TOW missiles to the U.S. Army and Marine Corps, and to the militaries of Saudi Arabia and Oman. Deliveries will continue through March 2018.

Raytheon's TOW missile. Photo: Wikimedia Commons.

The Pentagon's contract announcement did not directly link Thursday's award to the December DSCA notification to Congress, which was valued at $1.07 billion. The announcement did, however, note that TOWs will be delivered for use by the Saudi Arabian National Guard -- the recipients named in the DSCA notification. No other contract awards for TOWs naming any Saudi military formation as a recipient have been announced by DoD since the DSCA's notification in December.

The Pentagon indicated that Thursday's contract modifies an award initially given to Raytheon back in September 2012. At the time, the original contract funded only the purchase of TOW missiles for the U.S. Army and Marine Corps -- and was worth only $97.8 million at the time. It has since expanded both in scope and in value.

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Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of Raytheon Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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