Raytheon Co., the world’s largest missile maker, may receive an order from Japan within 12 months for the latest version of the Patriot missile system, Morgan Stanley analyst Heidi Wood wrote in a note to clients, according to Bloomberg.
An order for the Patriot Advanced Capability-3 System, or PAC-3, could lift Raytheon’s profit by 10 cents to 15 cents a share annually over four years, Bloomberg reports. The company, based in Waltham, Massachusetts, is the fifth-largest U.S. defense contractor.
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PAC-3 is the latest version of the Patriot missile system that Raytheon produces with Lockheed Martin Corp. The missile it fires hits the incoming warhead to destroy it, while the original version exploded in the path of enemy warheads, Bloomberg reports.
Japan is boosting spending to defend against a possible attack by North Korea, which has
tested ballistic missiles and is suspected to have nuclear weapons, according to reports.
The financial impact of the Japanese order would be great for Raytheon, which gets about two-
thirds of the program sales, Wood reportedly wrote.
Raytheon’s profit is expected to rise to $1.30 a share this year and $1.72 next year, from $1.29
last year, Bloomberg reports.
Japan’s has scheduled installation and testing for 2006, initial operation in 2007 and to activate the full system in 2011, Bloomberg reports.
Nine other countries are also considering Patriot orders, including Taiwan, South Korea, Turkey, Netherlands, India, Egypt, UAE, Qatar and Pakistan, Bloomberg reports.
The U.S. used the Patriot in the Iraq war.
Bloomberg News
