![]() ![]() Which missile performs better may determine whether $3 billion-plus in revenue goes to Boeing - or gets shipped off to Norway instead. The Navy is currently testing both missilesfor compatibility with its Littoral Combat Ships, equipping the USS Coronado (LCS 4) with the Harpoon and the USS Freedom (LCS 1) with the Naval Strike Missile. On the other hand, Kongsberg describesthe Naval Strike Missile as "the only fifth generation long range precision strike missile in existence," which would seem to suggest that the weapon possesses "stealth" characteristics lacking in Boeing's offering, which could appeal to the U.S. But that hasn't prevented Norway from using the missile to arm its naval corvettes and frigates. Kongsberg's weapon, with a similar-size warheadbut a range of only 107 nautical miles, seems somewhat inferior to the Boeing variant at first glance. Together, Kongsberg and Raytheon are trying to convince the Navy to buy Kongsberg's Naval Strike Missile instead of Boeing's new-and-improved Harpoon NG. To win those revenues and earn those profits, however, Boeing must beat out a challenger from across the ocean - and another from closer to home.Ĭompeting with Boeing for the Navy's new missile contracts is a joint venture between Norwegian defense powerhouse Kongsberg and its U.S. ![]() In contrast, McConnell told me, your bottom-basement going. Upgrades on existing Harpoons alone, therefore, could be worth close to $300 million to Boeing - about $0.46 per share over time. The larger Army Tactical Missile System (ATACMS), fired from the same HIMARS and MLRS launchers, costs roughly 750,000 to 820,000. Dueling missilesĪccording to data from S&P Global Market Intelligence, Boeing earns about a 9.8% pre-tax profit on revenues in its Military Aircraft division, which is responsible for production of the Harpoon. There is, however, one problem with this rosy scenario: Boeing has a rival. And there's additional money to be made selling new Harpoon NGs. But if you assume that, say, two-thirds of the 7,500 Harpoons sold since the missile's introduction in 1977 are still around today,and that the cost of upgrading an old Harpoon is half the cost of buying a new missile (as Boeing says it is), then that's still a $3 billion market opportunity for Boeing from upgrades alone. Such upgrades wouldn't bring as much revenue as selling all-new missiles (at $1.2 million a pop). Boeing hopes that if the Navy chooses to deploy the Harpoon NG, it will tap Boeing to upgrade existing stocks of Harpoons to the new configuration. ![]()
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