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RTX Corporation’s RTX business segment, Raytheon, recently secured a deal for sustainment material and support for the AN/SPY-6(V) Family of Radars. The deal has been provided by the Naval Sea Systems Command, Washington, D.C.
Valued at $38 million, the contract is expected to be completed by May 2026. The work related to this contract will be executed in Andover, MA, Chesapeake, VA, and McKinney, TX.
RTX's Proficiency in Producing Superior Radars
With the rapid rise of geopolitical tensions in recent years, governments worldwide have increased their military arsenals. As radars constitute a crucial component of this arsenal, rising defense spending has resulted in an increase in demand for combat-proven radars.
This must have been ushering in a solid order flow for radar manufacturing companies like RTX, whose extensive expertise in radar technology applies to a vast range of advanced radar systems for various applications, including air defense, missile defense, maritime surveillance and a few more. The latest contract win is a bright example of that.
The company’s SPY-6 radar family can protect against ballistic missiles, cruise missiles, hostile aircraft and surface ships at the same time. They offer various advantages over conventional radars, including a much longer detection range, higher sensitivity and more accurate discriminating. Their scalable and modular radar arrays decrease costs and maintenance requirements while addressing the mission requirements of seven classes of ships.
RTX’s Growth Opportunities
Advanced radar systems, which boast features of next-generation technology-based warfare capabilities, have been gaining momentum due to radars' growing importance in military surveillance.
This must have prompted the Mordor Intelligence firm to project a CAGR of 5.2% for the military radar market in the 2024-2029 period. Such growth projections bode well for prominent radar manufacturers like RTX.
RTX’s product portfolio consists of varied radars, such as AN/TPY-2, APG-63(V)3, APG-79 and APG-82(V)1, GhostEye MR and a few more, which enjoy solid demand in the global military radar market.
Opportunities for Other Defense Companies
Some other defense contractors, which are also major radar producers, are projected to gain from the expanding global military radar industry. Those companies have been discussed below.
Lockheed Martin LMT: The company’s radars are the choice of more than 45 nations across six continents. Its product portfolio consists of varied radars, such as missile defense radars, ballistic missile radars and surveillance radars like TPY-4, the AN/APY-9 Radar, the AN/TPQ-53 Radar System, SPY-7, TPS-77 and Sentinel A4.
LMT has a long-term (three to five years) earnings growth rate of 4.6%. The Zacks Consensus Estimate for the company’s 2024 sales indicates year-over-year growth of 5.5%.
Northrop Grumman NOC: The company has been at the forefront of Active Electronically Scanned Array (“AESA”) innovations for more than 60 years and is a pioneer in AESA radars. Its diverse product portfolio also includes a handful of other radars, such as the AN/ZPY-5 VADER, AN/TPS-80 G/ATOR, AN/TPS-78 and HAMMR.
Northrop has a long-term earnings growth rate of 19.1%. The Zacks Consensus Estimate for the company’s 2024 sales calls for year-over-year growth of 5.3%.
L3Harris Technologies LHX: The company is a renowned manufacturer of combat-proven radars. Its product portfolio includes the SPS-48 land-based surveillance radar, the AN/APY-11 Multimode radar, the Tactical Air Surveillance radar, the AN/SPS-48G(V)1 long-range 3D surveillance radar and many more.
L3Harris has a long-term earnings growth rate of 9.2%. The Zacks Consensus Estimate for LHX’s 2024 sales implies an improvement of 9.7% from the prior-year figure.