Bloomberg News

Raytheon, Lockheed See Gains in $604.5 Bln Senate Defense

August 03, 2012

(Corrects story published Aug. 2 to add Lockheed Martin in first paragraph and report in second paragraph that it gained $194.2 million from the Patriot-3 addition by Senate committee.)

Raytheon Co. (RTN:US), the top U.S. maker of military missiles, and No. 1 overall defense contractor Lockheed Martin Corp. (LMT:US) saw millions of dollars added to their programs as part of a $604.5 billion defense budget request approved today by the Senate Appropriations Committee.

The panel endorsed adding $194 million to buy 50 more Patriot-3 missile defense interceptors made by Bethesda, Maryland-based Lockheed Martin.

The committee added $163 million to purchase a second mobile air defense radar known as the AN/TPY-2 made by Waltham, Massachusetts-based Raytheon.

It also added $5 million more than the Pentagon requested for Raytheon’s Tomahawk cruise missiles, though it cut $17 million from a $381.7 million Defense Department request for 89 additional Raytheon Standard Missile-6 weapons, citing unit cost increases and testing issues.

The $604.5 billion bill also includes war spending for Afghanistan. On July 19, the House of Representatives passed legislation giving the Pentagon $607.1 billion in the 2013 fiscal year for weapons purchases, personnel and war operations in Afghanistan, or about $2 billion more than the Obama administration requested. The Senate version matches the White House request. A floor vote hasn’t been scheduled.

Army aviation accounts also benefited as the appropriations panel added $700 million to replace combat losses, money that benefits helicopter makers Chicago-based Boeing Co. (BA:US) and Stratford, Connecticut-based United Technologies Corp. (UTX:US)

More Jets

The panel backed roughly the full $9.1 billion request for Lockheed Martin for 29 F-35 jet fighters and added $777 million for a second Virginia-class submarine to be bought in 2014 and built by Huntington Ingalls Industries Inc. (HII:US) of Newport News, Virginia, and General Dynamics Corp. (GD:US) of Falls Church, Virginia. The House bill contains similar submarine funding.

The committee cut from the Army’s request to $190 million from $287.3 million for the General Dynamics infantry “Manpack” radio.

The committee said the program was requesting more money than could be justified before testing of the radio is complete. The Pentagon’s testing office in a July 20 assessment criticized the radio as ineffective, unreliable and requiring more testing.

After the Senate votes, its version and the House bill will have to be reconciled in a conference committee before both houses vote on a bill to be sent to President Barack Obama for his signature.

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net


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Companies Mentioned

  • RTN
    (Raytheon Co)
    • $92.96 USD
    • 0.86
    • 0.93%
  • LMT
    (Lockheed Martin Corp)
    • $160.31 USD
    • 2.13
    • 1.33%
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