In his first decisive use of military force since entering the White House, President Donald Trump ordered the launch of 59 Tomahawk missiles on a Syrian airfield Thursday evening, and the maker of those missiles is feeling the love Friday as a result.
Raytheon (RTN) - Get Report shares opened with an initial 2% bump Friday, but has since slowed its gains to less than 1%. Raytheon's Tomahawk missiles cost more than $800,000 a piece, according to a report from U.K. news site The Sun.
Meaning the attack on Syria's Al Shayrat air base cost at least $50 million. That number, while nothing to scoff at for the U.S. taxpayer footing the bill, is a drop in the bucket for Raytheon, which clocked $24 billion in sales in 2016.
Overall, this strike doesn't necessarily move the needle for Raytheon in the near-term, explaining the muted impact in Friday's stock price.
But Trump's decisive attack Thursday indicates he may be less hesitant than his predecessor to use military force in international conflicts, which is clearly a positive sign for Raytheon.
And it may also be a good indicator for Tomahawk missile sales in particular.
Raytheon's missile systems had fourth quarter net sales of about $1.9 billion. All-told, Raytheon reported nearly $7.1 billion in revenues from missile systems last year compared to $6.6 billion in 2015.
The increase in net sales for the full-year was driven by higher sales on the Paveway missile program, though, not the Tomahawk.
During the fourth quarter, Raytheon booked $362 million for Paveway versus $309 million for the Tomahawk.
The last time Raytheon reported being awarded a major Tomahawk missile contract with a U.S. military outfit was in 2014 when the U.S. Navy awarded the defense contractor a $251 million contract to procure Tomahawk Block IV tactical cruise missiles for fiscal year 2014 with an option for 2015.
Raytheon then reported in March 2015 that it received a contract modification for about $122 million to the previously awarded firm-fixed-price contract for the procurement of 114 Tomahawk Block IV All Up Round missiles for the U.S. Navy.
The 2015 modification contract completed the Navy's planned purchase of 214 Tomahawk Block IV missiles for fiscal year 2015.
Raytheon did not report a contract award for Tomahawk missiles in 2016 and has not done so this year, either.