SEOUL: Raytheon generated $22.8 billion revenues in fiscal year 2014 (FY14), compared to $23 billion in fiscal year 2013 (FY13). The company estimates that in fiscal year 2015 (FY15), it will generate approx. $22 billion without showing any growth. Raytheon operates four main segments namely, Intelligence, Information and Services, Space, and Airborne System, Integrated Defense System, and Missile System.
The reason in revenue decline and the flat estimates for the current year is that most of Raytheon business is generated from the US. As US is reducing its budget on department of defense, the company is experiencing a decline in sale. This is the reason the company is trying to focus on international business.
Patriot is well known for its advanced protection against enemy missile threats, and Raytheon has been the sole provider of this system in both international and domestic markets. Along with this, the missiles for the Patriot will be provided by Lockheed Martin Corporation (NYSE:LMT), although the official announcement related to Lockheed’s involvement and terms of contract have not yet been disclosed.
South Korea has been active in revamping its defenses; with this aim, it also announced yesterday that it is also investing in the Korean Fighter Experimental (KF-X) program to replace its aging fleet of F-4s and F-5s, and signed a $7.8 billion deal with Lockheed Martin in partnership with Korea Aerospace Industry (KAI) to provide 120 fighter jets by 2025.
Last year, South Korea also ordered 40 F-35 military aircraft, which will be added to its fleet. South Korea has also increased its defense budget, and now plans to invest 96 trillion won during 2016 to 2020, compared to earlier budget of 70 trillion won allocated from 2015 to 2019.
