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Raytheon pushes for overseas growth

September 11, 2007 12:13 PM ET



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-- Raytheon Co., a technology and weapon systems provider to governments throughout the world, said Tuesday it expects more sales to Middle East and Asia countries in the next three years, thanks in part to the stronger petrodollar and the perception of a more intimidating China.

Currently, the Waltham, Mass., company (RTN) receives between 18% to 19% of its revenue from overseas sales, Chief Executive William Swanson said at a Morgan Stanley conference. That could climb to as much as 25% over the next 5 years, he said.

"The Middle East now has the money with petrodollars to upgrade their defense systems, and it looks like the (Bush) administration is going to give them the capability to acquire this equipment," he said.

Raytheon's Patriot missile system remains in high demand, with Japan showing more interest following China's successful use of a missile to destroy an orbiting satellite last January, Swanson said. Taiwan and South Korea are also showing a greater interest in Raytheon's products, he said.

"Across the world...things are lining up better," Swanson said, adding Raytheon currently does business in about 80 countries.

"In a global sense, our growth has been organic, and I see that continuing," he said. "We're in the right markets."

Additionally, Swanson said the upcoming U.S. military "reset," when old and destroyed equipment used during the Iraq occupation are replaced, will be a "big number" for the company.

As the primary ground-based sensor for this mission, the UEWR successfully acquired, tracked and classified the target system, providing critical targeting data to the system under test. The UEWR achieved all mission objectives as it continues its flawless support to GMD flight tests and path to Air Force operational acceptance.

Positioned in the eastern Pacific Ocean, the XBR initiated track on the target complex and collected valuable data, which will be used to hone algorithms for future flight tests. The radar achieved all mission objectives. This test marks the third successful mission that the Sea-Based XBR has participated in since last September.

"This highly successful test of the GMD system once again demonstrates Raytheon's systems performance and reliability," said Louise Francesconi, Raytheon Missile Systems president. "The test clearly demonstrates the maturity of our technology and our ability to provide this critical capability to the nation."

"The XBR and UEWR demonstrated exceptional performance in this critical test of U.S. missile defense capability," said Pete Franklin, vice president, National & Theater Security Programs for Raytheon Integrated Defense Systems (IDS). "This latest exercise confirms the radars' ability to gather information necessary to support an intercept."

The test marked the second time an operationally configured ground-based interceptor was launched from an operational GMD site at Vandenberg Air Force Base, Calif. The target was launched from Kodiak, Alaska.

Designated Flight Test Ground-based Midcourse Defense-03a (FTG-03a), the test included a planned intercept of the target as one of its objectives. Other objectives included the EKV's ability to successfully detect, track,

discriminate a target in space and communicate with ground-based sensors, and included participation of the SBX in the test.

This test again demonstrated the system's capability to launch a ground- based interceptor and perform EKV separation and delivery of the EKV to the desired point in space and time.

Raytheon is a major subcontractor to The Boeing Company, the prime contractor for the GMD program, providing the EKV, UEWRs and the XBR.

Continuing the Raytheon heritage with UHF phased array radars, the Beale UEWR program upgrades existing PAVE PAWS and Ballistic Missile Early Warning System radars by adding missile defense capabilities while retaining missile warning and space surveillance missions. As key sensors for the Missile Defense Agency's Ballistic Missile Defense System (BMDS), UEWR and SBX provide midcourse target detection, tracking, and assessment for the GMD portion of the BMDS to protect the U.S. from ballistic missile attacks.

Raytheon Integrated Defense System is upgrading UEWRs at Beale Air Force Base, Calif., and Fylingdales, U.K., under a subcontract to Boeing. Raytheon IDS is also upgrading the UEWR at Thule Air Base, Greenland, under a separate Missile Defense Agency contract awarded in April 2006.

Raytheon Company, with 2006 sales of $20.3 billion, is a technology leader specializing in defense, homeland security and other government markets throughout the world. With a history of innovation spanning more than 85 years, Raytheon provides state-of-the-art electronics, mission systems integration and other capabilities in the areas of sensing; effects; and command, control, communications and intelligence systems, as well as a broad range of mission support services. With headquarters in Waltham, Mass., Raytheon employs 73,000 people worldwide.


Raytheon's earlier hit-to-kill successes with the GMD program occurred Oct. 2, 1999; July 13 and Dec. 3, 2001; March 15 and Oct. 14, 2002; and Sept 1, 2006.

The EKV has its own infrared seeker, propulsion, communications, discrimination algorithms, guidance and control system, and computers to support target selection and intercept decisions in the end game of the intercept mission. The EKV is the intercept component of the Ground Based Interceptor (GBI), the weapon element of the GMD system. As part of the payload, Raytheon also builds and delivers the booster adaptor, which provides the EKV interface for the Orbital booster. The adaptor provides EKV with power, communication and environmental protection prior to eject. Raytheon i