Sunday, March 20, 2011

Tomahawk Strike On Libya Great News For Raytheon

Whoever said war is bad for business never worked for a defense contractor.  The international community has begun launching strikes on Muammar Gaddhafi's regime to prevent further atrocities.  That in itself is great news.  The U.S. won't take the lead but its edge in specialty weapons comes into play early.  The allies have fired over 100 Tomahawk cruise missiles to knock out Libyan air defense systems.  This will require spent inventories to be replenished.  That's great news for Raytheon, the Tomahawk's contractor

The Tomahawk reportedly costs $756k a copy.  RTN can thus expect new orders for at least $76mm later this year as soon as the relevant procurement commands generate their requirement statements.  The company will have to wait until the battle damage assessment photos are declassified before it can use the results in its advertisements.  War is hell, but you can't make money in hell like you can in war.

Full disclosure:  No position in RTN at this time.