Don't look now, but some of the U.S. Navy's smallest warships could soon be packing considerably more heat.
On Tuesday, Raytheon (NYSE:RTN) announced that its new MK-60 Patrol Coastal Griffin Missile System "has achieved initial operational capability ," moving one step closer to deployment aboard Navy ships dealing with the threat of being "swarmed" by small, low-tech fast-attack boats.
Originally designed as an air-to-surface missile to be fired from Lockheed Martin (NYSE:LMT) AC-130 gunships, Raytheon has for some years been working to tweak the design of its 33-lb., 43-inch-long AGM-176 "Griffin" mini-missile so that it can be launched from Navy gunboats.
Specifically, the missile is being designed to launch from at least two naval platforms -- the Littoral Combat Ships now being built by General Dynamics (NYSE:GD) and Lockheed, and also the Navy's existing fleet of 13 Cyclone-class Coastal Patrol boats.
As recently as November, the Navy had plans to install the MK-60 Griffin Missile System aboard 10 Cyclone-class PC vessels that would be deployed out of the U.S. naval base in Manama, Bahrain. As the Navy described it, installing the Griffin would add an extra layer of defense to the boats' existing MK 38 cannon, capable of hitting fast-moving boats as far as three nautical miles out. (That's about twice the range of the MK 38 "chain gun" manufactured by Israel's Rafael and Britain's BAE Systems (OTC:BAESY)).
What it means to investors
At least eight of the Cyclone-class PCs are currently based in the Gulf, forming part of the U.S. 5th Fleet. However, because the Cyclones were only built with an anticipated lifespan of 15 years, most of these boats are due (or even past due) for decommissioning. Such an eventuality won't mark the end of Griffin's usefulness, though, because Raytheon is also proposing installation of the missiles aboard the new, larger Littoral Combat Ships that will eventually replace the Cyclones, and take over their coastal (littoral) patrol duties.
Moreover, because most world navies are heavy on smaller, coastal defense craft closer in size to America's Coastal Patrol craft, than to, say, its guided missile destroyers, the Griffin may find new markets as well -- slotting in nicely with Raytheon's strategy of diversifying revenues around the globe.
Over the six years since Raytheon began producing the Griffin, it has sold more than 2,000 units of the missile. As the Griffin takes on new duties as a naval munition, Raytheon could sell thousands more in the years to come.