Raytheon Secures $49.8M U.S. Navy Contract for SM-6 Missile Production

Precision Strike Demand Fuels Raytheon's Defense Backlog

Raytheon (NYSE:RTN) has secured a $49.79 million firm-fixed-price contract modification to support full-rate production of its Standard Missile-6 (SM-6) tactical systems for the U.S. Navy, reinforcing the company's position as a key defense contractor amid rising global security spending.

The award, announced Monday, comes as part of the U.S. Navy's FY2025 weapons procurement budget, which designates continued investment in Raytheon's advanced multi-mission missile technology.

The SM-6 system offers over-the-horizon anti-air, anti-surface, and terminal ballistic missile defense, and remains one of the few munitions in the Pentagon's arsenal capable of defending against hypersonic threats.

Contract Highlights

The contract modification includes:

• Funding for spare components

• Manufacturing, assembly, testing, and delivery of SM-6 Tactical All-Up Rounds

• Completion timeline extending through April 2029

Work will be distributed across strategic U.S. defense manufacturing hubs:

• Tucson, AZ and East Camden, AR will each handle 35% of the work

• Additional contributions from Elma (NY), Middletown (OH), Anniston (AL) and Wolverhampton, UK

Raytheon's Financial and Operational Trajectory

The award adds to Raytheon's robust multi-year defense backlog. A deeper look using the Financial Growth API shows that Raytheon has steadily improved revenue growth in recent quarters, aided by strong government contract inflows and global geopolitical tensions.

• Revenue CAGR (3Y): 7.1%

• Defense backlog: Over $80 billion, as of the last reported quarter

• Free cash flow margin: Consistently above 8%, offering room for reinvestment in advanced missile technologies

Moreover, the Company Rating API reflects that Raytheon maintains a low-risk rating, underpinned by its government-heavy revenue model and consistent operating margins.

Strategic Relevance of the SM-6 Platform

Raytheon's SM-6 missile is more than just a tactical weapon — it is a cornerstone of layered naval defense for both current and future mission profiles:

• Enables anti-air warfare (AAW), anti-surface warfare (ASuW), and terminal ballistic missile defense (BMD)

• Compatible with Aegis Combat System and deployed aboard U.S. Navy destroyers and cruisers

• A key enabler for distributed maritime operations (DMO) and multi-domain battle doctrine

The multi-role nature of SM-6 provides the U.S. Navy with enhanced lethality, range, and response time, helping ensure operational superiority across contested theaters.

Outlook: Raytheon Positioned for Long-Term Defense Upside

This contract signals continued demand for Raytheon's high-performance tactical systems, aligning with rising defense appropriations in the U.S. and allied nations. The long-dated project timeline through 2029 ensures visibility into multi-year cash flows, supporting shareholder confidence and potential capital returns.

As defense modernization becomes increasingly focused on missile defense and hypersonic countermeasures, Raytheon is well positioned — both operationally and financially — to capitalize on the evolving threat landscape.

For more in-depth financial analysis of defense contractors and upcoming weapons system programs, explore real-time datasets from Financial Modeling Prep's full coverage of company ratings and growth fundamentals.