Raytheon Secures Up to $24.4 Billion Navy Contract for SM-6 Missiles

RTX's (NYSE: RTX) Raytheon unit has won a multiyear contract worth up to $24.4 billion to produce its Standard Missile-6 (SM-6) interceptors for the U.S. Navy. The award, announced by the service on Thursday, is a key part of a Pentagon initiative to restock munitions inventories depleted by global conflicts.

The Agreement

The contract spans five years and includes options for two additional years, according to the Navy. Its structure is designed to provide a consistent and reliable production pipeline for the SM-6, a versatile weapon used for both offensive strikes and missile defense missions.

Raytheon describes the SM-6 as the only combat-proven weapon capable of performing anti-air warfare, anti-surface warfare, and ballistic missile defense. The system can be deployed from a range of Navy vessels and land-based launchers.

Broader Push to Restock Arsenals

This agreement is the latest in a series of large-scale munitions contracts issued by the Pentagon this year. The strategy aims to incentivize defense contractors to accelerate production and expand capacity.

Other significant recent awards include:

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• A $20.7 billion provisional multiyear deal for Raytheon's AMRAAM air-to-air missiles in late September.
• A $58.6 billion Patriot interceptor contract awarded to Lockheed Martin (NYSE: LMT) in July.

These large, long-term production agreements are intended to give companies the stability needed to make significant investments in their manufacturing capabilities.

Industry Investment and Funding

While the contract provides a long-term demand signal, industry executives have noted that full-scale investment may be contingent on Congress appropriating the necessary funds for the deals. Without formal appropriation, contractors could face challenges in financing large investments in components and facilities.

For its part, RTX has stated that it has already invested heavily to meet rising demand. The company has focused on expanding its skilled workforce, automating production, and strengthening its supply chain partnerships to increase output for both near-term and future defense needs.