Raytheon Technologies Corp.’s RTX business segment, Collins Aerospace, recently secured a modification contract, under which it will procure 8,085 AN/ARC-210(v) radios. The Naval Air Warfare Center Aircraft Division, Patuxent River, MD has awarded the agreement.

Details of the Deal

Valued at $294.1 million, the contract is projected to be completed in September 2024. Per the terms, the aforementioned radios will be installed in more than 400 strategic and tactical airborne, seaborne, and land-based (mobile and fixed) platforms.

Work related to the contract will be executed in Cedar Rapids, IA.

Importance of AN/ARC-210 Radios

The AN/ARC-210(V) is an evolutionary family of software reprogrammable, multi-mode radios providing the warfighter with Line-Of-Sight (LOS) UHF/VHF (AM/FM) anti-jam secure voice/data communications and Beyond LOS Satellite Communications (SATCOM).

More than 40,000 AN/ARC-210 radios are equipped globally on more than 200 platforms. This surely reflects the solid demand that this communication system enjoys worldwide.

Raytheon’s Prospects in Military Communications

Increasing geopolitical tensions across the globe have prompted nations to strengthen their defense systems manifold. Notably, military communications, including airborne, air-ground, underwater, ground-based, and shipborne communications, form an integral part of a nation’s defense system for safe and secured transmission of data. Consequently, interoperability and better security of military services are the factors driving the growth of the military communications market.

With North America constituting the largest portion of the global military communications market, buoyed by increasing technological advancements in the region, Raytheon enjoys an esteemed position in this market.

Notably, modernized military communication systems and sophisticated software-defined radio technologies offered by Collins Aerospace provide advanced effectiveness in military communications. Also, the company’s military communication systems integrate seamlessly with existing platforms at very low operating costs.

These features must have made Raytheon’s military communication systems the preferred choice by Pentagon, as is evident from the latest contract win.

Looking ahead, the global military communications market size is projected to grow from $33.4 billion in 2020 to $40.6 billion by 2025, at a CAGR of 4%, as predicted by the Markets and Markets research firm. Such solid growth projections should boost Raytheon’s top-line performance in the coming days.

What About Other Defense Majors?

The aforementioned growth prospects of the global military communications market bode well for other defense primes, which are engaged in the communications market. These are:

Lockheed Martin’s LMT next-generation communication systems include the Whetstone system developed to extend communications to soldiers out of range of conventional networks, Warfighter Information Network - Tactical (WIN-T) system that provides Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR) capabilities, and a few more.

L3Harris Technologies’ LHX product portfolio includes tactical SATCOM terminals, RO Tactical Radio as well as RO-Mobile Awareness program, which provide rapid, global push-to-talk and visual Situational Awareness capabilities for users in remote locations.

For 60 years, Northrop Grumman NOC has been a leader in the design, development, and delivery of end-to-end communications and advanced networking capabilities sought out by the U.S. and allied military forces. The company’s leading Battlefield Airborne Communications Node (BACN) gateway system reached 200,000 combat operational flight hours in February 2021 since its first deployment with the U.S. Air Force in 2008.

Price Performance

In the past year, Raytheon Technologies’ shares have gained 35.1% compared with the industry’s 26% growth.

Image Source: Zacks Investment Research

Zacks Rank

Raytheon Technologies carries a Zacks Rank #3 (Hold), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Lockheed Martin Corporation (LMT) : Free Stock Analysis Report

Northrop Grumman Corporation (NOC) : Free Stock Analysis Report

L3Harris Technologies Inc (LHX) : Free Stock Analysis Report

Raytheon Technologies Corporation (RTX) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research