Raytheon Awarded $350 Mln Defense Contract Modification

(RTTNews) - The U.S. Department of Defense has increased the value of the contract awarded to defense contractor Raytheon Co. (RTN) for production of the the Standard Missile-3 Block IB missiles. The contract is now valued at $350.18 million.

The Department of Defense or DOD said Wednesday that Arizona-based Raytheon Missile Systems Co. was awarded a sole-source modification to an undefinitized contract action announced on January 9, 2014 to produce the SM-3 missiles. At that time, the contract was valued at $156.00 million.

The modification will increase the quantity of Standard Missile-3 missile material and all up round build up procured to 44 from 8. The work will be performed in Tucson, Arizona, and will still be required to be completed by September 2016. The Missile Defense Agency, Virginia, is the contracting activity.

The SM-3 is a ship-based missile system used by the U.S. Navy to intercept short-to-intermediate range ballistic missiles. The SM-3 destroys incoming ballistic missile threats by colliding with them, a concept sometimes described as "hitting a bullet with a bullet." The impact is the equivalent of a 10-ton truck traveling at 600 miles per hour.

The SM-3 Block IB has an improved, two-color infrared seeker and an advanced system of guidance rockets, the Throttleable Divert and Attitude Control System, that helps steer the missile's kill vehicle into the target's path. The SM-3 program is a critical piece of the United States' Phased Adaptive Approach for missile defense.

RTN closed Wednesday's regular trading session at $100.69, up $0.30 or 0.30 percent on a volume of 1.84 million shares. In after-hours, the stock further gained $1.10 or 1.09 percent to $101.79.