RTX's Raytheon awarded $736 million contract to produce AIM-9X missiles

Rhea-AI Summary

Raytheon, an RTX business, has been awarded a $736 million contract by the U.S. Navy to produce AIM-9X SIDEWINDER missiles. The contract focuses on the improved Block II variant, which addresses hardware obsolescence and ensures superior performance and long-term reliability. The AIM-9X is described as the most advanced infrared-tracking, short-range, air-to-air and surface-to-air missile in the world.

The missile is compatible with various modern aircraft and provides layered defense capabilities, including integration with the National Advanced Surface-to-Air Missile System (NASAMS). Used by over 30 allied and partner nations, the AIM-9X continues to gain international interest, with the Czech Republic becoming the most recent customer in March 2024. The contract work will be carried out at various locations within the continental U.S. through 2029.

Positive

• Raytheon secured a $736 million contract for AIM-9X missile production
• AIM-9X is used by over 30 allied and partner nations
• Increasing international interest, with Czech Republic as the newest customer
• Contract work to continue through 2029, providing long-term revenue

Negative

• None.

Insights

Defense Industry Analyst

This $736 million contract for AIM-9X SIDEWINDER missiles is a significant win for RTX's Raytheon business. The deal underscores the continued demand for advanced short-range missile systems, both domestically and internationally. Key points to consider:

• The contract addresses hardware obsolescence, ensuring long-term reliability and performance improvements.
• Strong international demand, with over 30 allied nations using the system, indicates potential for future sales and revenue growth.
• The recent addition of the Czech Republic as a customer, linked to their F-35 procurement, highlights the missile's integration with modern aircraft platforms.
• The contract's duration through 2029 provides steady, long-term revenue for RTX's Naval Power division.

This contract reinforces RTX's position in the missile defense market and aligns with the growing global focus on air defense capabilities. For investors, it represents a stable revenue stream and potential for market expansion in the defense sector.

Financial Analyst

The $736 million contract is a positive development for RTX, representing approximately 0.45% of its current market cap. While not transformative, it's a substantial addition to the company's order backlog. Key financial implications include:

• Revenue visibility: The contract extends through 2029, providing long-term revenue stability for the Naval Power division.
• Margin potential: As an upgrade to an existing product, the Block II variant likely benefits from established production efficiencies, potentially supporting healthy profit margins.
• Growth prospects: The expanding international customer base, now including the Czech Republic, suggests opportunities for additional sales and potential follow-on contracts.
• Production capacity investment: The company's commitment to increasing production capacity indicates confidence in future demand and could lead to economies of scale.

Investors should view this positively as it reinforces RTX's strong position in the defense market and its ability to secure large, long-term contracts in a competitive environment.

Missile is proven across air-to-air and ground-launch domains

TUCSON, Ariz., Oct. 10, 2024 /PRNewswire/ -- Raytheon, an RTX (NYSE: RTX) business, was awarded a $736 million contract from the U.S. Navy to produce AIM-9X® SIDEWINDER® missiles.

This contract is for the improved Block II variant, which addresses hardware obsolescence through upgrades to ensure superior performance and long-term reliability.

"AIM-9X remains the weapon of choice for short-range air-to-air and surface-to-air missile defense, and worldwide customer demand is strong," said Barbara Borgonovi, president of Naval Power at Raytheon. "We're investing, innovating, and partnering with our U.S. Navy customer to significantly increase our AIM-9X production capacity starting with orders next year."

AIM-9X is the most advanced infrared-tracking, short-range, air-to-air and surface-to-air missile in the world. It is configured for easy installation on a wide range of modern aircraft and provides proven layered defense with ground-launched capabilities, including the National Advanced Surface-to-Air Missile System, or NASAMS.

A U.S. Navy-led joint program with the U.S. Air Force, AIM-9X is used by over 30 allied and partner nations and continues to gain international interest. In March 2024, the Czech Republic became the most recent international customer by signing a letter of agreement for procurement of the missile for use on their F-35 aircraft.

Work under this contract will take place in various locations within the continental U.S. through 2029.

About Raytheon
Raytheon, an RTX business, is a leading provider of defense solutions to help the U.S. government, our allies and partners defend their national sovereignty and ensure their security. For more than 100 years, Raytheon has developed new technologies and enhanced existing capabilities in integrated air and missile defense, smart weapons, missiles, advanced sensors and radars, interceptors, space-based systems, hypersonics and missile defense across land, air, sea and space.

About RTX
With more than 185,000 global employees, RTX pushes the limits of technology and science to redefine how we connect and protect our world. Through industry-leading businesses – Collins Aerospace, Pratt & Whitney, and Raytheon – we are advancing aviation, engineering integrated defense systems, and developing next-generation technology solutions and manufacturing to help global customers address their most critical challenges. The company, with 2023 sales of $69 billion, is headquartered in Arlington, Virginia.

For questions or to schedule an interview, please contact corporatepr@rtx.com

 

View original content:https://www.prnewswire.com/news-releases/rtxs-raytheon-awarded-736-million-contract-to-produce-aim-9x-missiles-302272427.html

SOURCE RTX

FAQ

What is the value of the contract awarded to Raytheon for AIM-9X missiles?

Raytheon, an RTX business, was awarded a $736 million contract from the U.S. Navy to produce AIM-9X SIDEWINDER missiles.

What improvements does the Block II variant of the AIM-9X missile offer?

The Block II variant of the AIM-9X addresses hardware obsolescence through upgrades to ensure superior performance and long-term reliability.

How many countries use the AIM-9X missile system?

The AIM-9X missile system is used by over 30 allied and partner nations and continues to gain international interest.

When did the Czech Republic become a customer for the AIM-9X missile system?

The Czech Republic became the most recent international customer for the AIM-9X missile system in March 2024 by signing a letter of agreement for procurement.

What is the timeline for the contract work on the AIM-9X missiles for RTX?

The contract work for the AIM-9X missiles will take place in various locations within the continental U.S. through 2029.