WASHINGTON — Pentagon officials have approved the Navy's plan to buy 1,353 of Raytheon Co.'s new Tactical Tomahawk cruise missiles for as much as $2 billion over five years, according to budget documents.
The weapon would enter full production in fiscal 2004, and the Navy would spend $241 million that year to buy 292 missiles and $195 million in fiscal 2005 for the next 227, according to a "decision document" signed by the Pentagon's comptroller.
"This budget news reflects that Tactical Tomahawk should become a huge program for Raytheon," said Paul Nisbet, a defense analyst for JSA Research Associates. "This one is on its way and should be a big winner." Nisbet rates the company a "hold" and owns no Raytheon stock.
The Tactical Tomahawk is designed to fly to a target's general location, loiter in the air, and receive new coordinates. The missile has an improved navigation and guidance computer, strengthened defenses against attempts to jam its Global Positioning System, and an ability to transmit pictures of targets immediately before impact.
Since the 1991 Persian Gulf War, the Navy has fired about 1,100 earlier-model Tomahawks, including up to 70 against Taliban and Al Qaeda targets in Afghanistan.
The new weapon entered initial production last year, and the Navy bought 106 of those models this year. The weapon completed its first flight test this summer and would enter the fleet's arsenal in 2004.
Raytheon shares yesterday fell 35 cents to $28.20 on the New York Stock Exchange.
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