Mario, getting back to ATPX supplying the shells for Raytheon's missiles, or reason number xyz why the takeover price for ATPX is ridiculously low:
<Conflict Gives Raytheon Big Contracts
By TOM KIRCHOFER
Associated Press Writer
BOSTON (AP) -- The missiles and bombs raining down on Serb forces in Yugoslavia could add up to big money for the Raytheon Co. (NYSE:RTNa - news; RTN - news), whose officials estimate they could gain about $1 billion in new contracts to replace munitions used in the Balkans.
While 10-figure defense outlays are nothing new in the United States, Raytheon's direct link between military action and possible new revenues cast the Kosovo conflict in a new light, as a war that could be profitable to American defense contractors.
Raytheon Systems Co., Raytheon's defense unit, is eyeing Pentagon contracts for the replacement of weaponry used in the nearly three-month-old engagement.
Dave Shea, a spokesman for Raytheon Systems, said Thursday the company sees the potential for $1 billion in new orders. ''But contract awards have not started flowing yet.''
He said the company is trying to capitalize on a variety of congressional outlays, including $420 million for the renovation and upgrade of Tomahawk missiles.
Last month, President Clinton signed a bill that earmarked $12 billion for the air assault, as well as for the Kosovo Albanian refugees, Balkan countries near the fighting and U.S. forces around the globe.
Lexington, Mass.-based Raytheon expects contract awards within six to 12 months, with the work spread out over about two or three years, Shea said.
The prospect of a humanitarian crisis paying off for American executives and shareholders is unsettling for investment managers like Sophia Collier, who chairs Citizens Funds, a Portsmouth, N.H., mutual fund company that tries to practice what it calls socially responsible investing.
''We don't hold Raytheon. One of the things the fund has done is made a conscious decision not to hold the stock of military contractors,'' said Collier, the company's chairwoman. ''We've made the moral decision to avoid profiting from war.''
Still, Raytheon has been a hot stock, and analysts expect the new business to benefit shareholders.
''It's certainly significant,'' said Paul Nisbet, a defense analyst at JSA Research Inc.
The defense giant had sales of $4.9 billion for the quarter ending in April, and with any new contracts spread over a few years, ''its impact on any one year is not great,'' Nisbet said.>
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