RTX receives U.S. Navy contract for ESSM Block 2 Missiles

Rhea-AI Summary

Raytheon, an RTX business, has secured a $525 million contract from the U.S. Navy to produce ESSM Block 2 missiles and spares for the U.S. and allied nations. The ESSM Block 2 is a short to medium-range, ship-launched, dual-mode guided missile with increased maneuverability and improved performance over its predecessor.

Key features of the ESSM Block 2 include:

• Reduced dependence on shipboard illumination
• Integration with various combat systems and launchers
• Improved performance in stressing marine environments
• Significant digital processing margin for future software improvements

The missile is managed by the NATO SEASPARROW Consortium, comprising 12 nations, and represents over 50 years of international military-industrial cooperation.

Positive

• Secured a $525 million contract from the U.S. Navy
• ESSM Block 2 offers improved performance and increased maneuverability
• Reduced dependence on shipboard illumination enhances versatility
• Integration with various combat systems and launchers increases adaptability
• Significant digital processing margin allows for future software improvements
• Cost savings and increased production capacity through common hardware and factory processes

Negative

• None.

Insights

Defense Industry Analyst

This $525 million contract for ESSM Block 2 missiles is a significant win for RTX, bolstering its naval defense portfolio. The deal highlights RTX's strong position in the evolving maritime security landscape, where ship self-defense systems are becoming increasingly crucial.

Key points to consider:

• The contract's value represents about 0.33% of RTX's market cap, a modest but meaningful contribution to the company's revenue stream.
• ESSM Block 2's enhanced capabilities, including improved maneuverability and reduced dependence on shipboard illumination, address evolving naval threats.
• The involvement of 12 NATO nations in the consortium suggests potential for future international sales and long-term program stability.
• RTX's strategy of using common hardware and processes across missile platforms could lead to improved profit margins and production efficiency.

While positive, investors should note that defense contracts can be subject to political and budgetary fluctuations. The long-term impact will depend on RTX's ability to secure follow-on orders and maintain its technological edge in this competitive sector.

Naval Technology Expert

The ESSM Block 2 represents a significant technological leap in naval defense systems. Its dual-mode guidance and increased digital processing margin are important advancements that address the rapidly evolving threat landscape at sea.

Key technological aspects:

• The missile's ability to operate in "stressing marine environments" suggests improved performance against low-altitude, high-speed threats.
• Reduced dependence on shipboard illumination enhances the missile's autonomy and potentially increases the number of simultaneous engagements a ship can conduct.
• The "significant digital processing margin" indicates a future-proof design, allowing for software updates to counter new threats without hardware changes.

RTX's approach of leveraging learning from other active seeker systems like AMRAAM and Standard Missile 6 demonstrates a smart, cost-effective development strategy. This cross-platform synergy could accelerate future innovations and maintain RTX's competitive edge in naval defense systems.

Multi-mission weapon system will provide increased flexibility and capability for U.S. and allied navies

TUCSON, Ariz., Sept. 30, 2024 /PRNewswire/ -- Raytheon, an RTX (NYSE: RTX) business, has received a $525 million contract from the U.S. Navy to produce ESSM Block 2 missiles and spares for the U.S. and allied nations.

ESSM Block 2 is a short to medium-range, ship-launched, dual-mode, guided missile that has increased maneuverability and improved performance over its Block 1 predecessor.

"The role of self-ship and local area defense has become increasingly important, and ESSM Block 2 delivers critical capability in this mission," said Barbara Borgonovi, president of Naval Power at Raytheon. "By partnering with the U.S. Navy and allied navies, we're ensuring this versatile system is ready to support our fleets around the world."

The newest ESSM variant reduces dependence on shipboard illumination and is integrated on a wide variety of combat systems and launchers, delivering improved performance in stressing marine environments, and has significant digital processing margin to keep pace with evolving threats through software improvements.

Leveraging learning from other active seeker systems – such as AMRAAM and Standard Missile 6 – RTX is using common hardware and factory processes across multiple missile platforms to enable cost savings and increased production capacity. Additionally, the consortium continues to invest in test infrastructure and material to keep capacity ahead of demand and accelerate deliveries.

ESSM is managed by the NATO SEASPARROW Consortium composed of 12 nations: Australia, Belgium, Canada, Denmark, Germany, Greece, the Netherlands, Norway, Portugal, Spain, Türkiye, and the United States. The consortium is NATO's largest and most successful cooperative weapons project and represents over 50 years of international military-industrial cooperation.

About Raytheon 
Raytheon, an RTX business, is a leading provider of defense solutions to help the U.S. government, our allies and partners defend their national sovereignty and ensure their security. For more than 100 years, Raytheon has developed new technologies and enhanced existing capabilities in integrated air and missile defense, smart weapons, missiles, advanced sensors and radars, interceptors, space-based systems, hypersonics and missile defense across land, air, sea and space.

About RTX 
With more than 185,000 global employees, RTX pushes the limits of technology and science to redefine how we connect and protect our world. Through industry-leading businesses – Collins Aerospace, Pratt & Whitney, and Raytheon – we are advancing aviation, engineering integrated defense systems, and developing next-generation technology solutions and manufacturing to help global customers address their most critical challenges. The company, with 2023 sales of $69 billion, is headquartered in Arlington, Virginia.

For questions or to schedule an interview, please contact corporatepr@rtx.com

View original content:https://www.prnewswire.com/news-releases/rtx-receives-us-navy-contract-for-essm-block-2-missiles-302261630.html

SOURCE RTX

FAQ

What is the value of the contract RTX received for ESSM Block 2 missiles?

RTX received a $525 million contract from the U.S. Navy to produce ESSM Block 2 missiles and spares for the U.S. and allied nations.

What are the key improvements of ESSM Block 2 over its predecessor?

ESSM Block 2 offers increased maneuverability, improved performance, reduced dependence on shipboard illumination, integration with various combat systems and launchers, and significant digital processing margin for future software improvements.

How many nations are part of the NATO SEASPARROW Consortium managing the ESSM?

The NATO SEASPARROW Consortium is composed of 12 nations: Australia, Belgium, Canada, Denmark, Germany, Greece, the Netherlands, Norway, Portugal, Spain, Türkiye, and the United States.

What cost-saving measures is RTX implementing for ESSM Block 2 production?

RTX is using common hardware and factory processes across multiple missile platforms to enable cost savings and increased production capacity for ESSM Block 2 and other missile systems.