Summary
- Raytheon Technologies saw $1.3 billion in contract awards and prospective awards in August 2021.
- The order inflow shows the relative stability of the Defense industry.
- September will be an interesting month as the DoD fiscal year comes to an end.
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Raytheon Technologies (RTX) is one of the companies that I like due to its diversified nature serving the Defense industry allowing it to lean on its relative stability while also serving the commercial aircraft industry enabling it to benefit from the long-term growth prospects. In this report, I will have a look at the Defense contracts for Raytheon Technologies showing the stability of the business using the TAF Defense Contracts Monitor.
Figure 1: Raytheon Technologies Defense Contracts (Source: The Aerospace Forum)
During the month, there were contract announcements with a value of $1.3 billion for Raytheon Technologies, which is down $2.1 billion compared to the previous months. We have also removed announcements for which a company has to compete for each order separately and indefinite-deliver/indefinite-quantity (IDIQ) contracts, which serve as negotiated frameworks against which task and delivery orders can be placed. Absent of these orders, the framework itself does not add value to the backlog. Removing these kinds of contracts shows that the value of the contracts went from $3.4 billion in July to $297.9 million. This decline was driven by lower contract value for the Long Range Stand Off Missile, lower Stinger contract value, lower F-16 engine sales, lower Next Generation Jammer sales and lower advanced medium-range air-to-air missile sales.
