The Australian army has chosen Leonardo DRS to provide state-of-the art computing infrastructure for its fleet of M1A1SA Abrams main battle tanks and other combat vehicles.

The company was awarded a $3.1 million direct commercial sale contract for Leonardo’s next-generation battle management system (BMS), called the Mounted Family of Computer Systems (MFoCS).

It is the first order for the initial phase of the Australian army’s Land 907 BMS program to provide armored cavalry units with improved connectivity within the Australian Defense Force and increased interoperability with United States and allied battle-management systems in the field. Ironically, Leonardo DRS will produce MFoCS systems in its Melbourne, Fla., facility and install the system in five Australia locations.

Leonardo DRS is a U.S. based division of Italy’s Leonardo.

Leonardo DRS already holds contracts worth $53 million to provide the U.S. Army tanks and vehicles with MFoCS. The orders are part of an indefinite delivery/indefinite quantity contract.

“MFoCS is the most advanced family of ultra-rugged computers and display systems engineered for military application and it can be installed on every tactical platform variant in use by all of the services,” Jerry Hathaway, vice president and general manager of DRS Land Electronics, said in a statement.

MFoCS systems are being installed in ground combat and tactical vehicles to provide modular computing capabilities for the U.S Army and other services, giving warfighters the next-generation of computing and display technology with faster processing performance. This enables support for simultaneous applications as well as the integration of additional sensors and communications networks. 

MFoCS units are being installed across U.S. military services including aircraft, wheeled and tracked vehicles, tactical operations centers, and other mission command platforms.

“Leonardo DRS is proud to provide the proven MFoCS system to the Australian Army for many of its armored cavalry vehicles. We have a long history of providing its land forces with combat-proven hardware for a wide range of platforms,” said Jerry Hathaway, vice president and general manager of DRS Land Electronics business.

The upgrade to MFoCS provides tankers with tablets and rugged sunlight-readable touchscreen displays, that support legacy battle command systems like Blue Force Tracking, and “provides commanders with numerous options that provide increased joint, U.S., and coalition interoperability,” according to a company statement.

Raytheon [RTN] on July 27 posted lower net income in its second quarter despite a solid increase in sales largely because 2016’s results included a one-time gain from a change in an international joint venture.

Net income tumbled 23 percent to $547 million, $1.89 earnings per share (EPS), from $713 million ($2.41 EPS), still topping consensus estimates by 13 cents per share. Earnings in the second quarter of 2016 benefited by $158 million (53 cents EPS) tax free gain stemming from a modification to a joint venture with France’s Thales. Raytheon’s income in the second quarter was also hit by 9 cents EPS related to the early retirement of debt.

At the operating level, Raytheon said improved performance and higher volume partially offset the declines related to the joint venture and debt retirement. Excluding the impact of the Thales joint venture, total operating margin remained level at 13.5 percent.

The company’s Forcepoint commercial cyber security segment, its smallest, posted an 80 percent drop in operating income to $2 million, driven by investments in sales and marketing. Thomas Kennedy, Raytheon’s chairman and CEO, said on the earnings call that the business remains a long-term play for the company said there are no near-term plans to divest it.

Raytheon continues to expect that Forcepoint will deliver double-digit sales and operating income growth, with prospects brightening beginning in 2018.

Sales in the quarter grew 4 percent to $6.3 billion from $6 billion in 2016, driven higher sales of Standard Missile 2 and 3 systems, Paveway laser guided bombs, an early warning radar contract with Qatar announced in February, and a domestic classified program in the Space and Airborne Systems segment. International business represented about 32 percent of sales.

Bookings in the quarter were solid at $6.5 billion, with international business accounting for 35 percent of the orders. Backlog at the end of the quarter stood at $36.2 billion, $1.2 billion higher than in 2016, with 42 percent coming from international customers.

International demand for the company’s products remains strong, Kennedy said. He highlighted a number of international opportunities, including Patriot air and missile defense systems for Poland and Romania, worth up to $5 billion and around $2 billion respectively.

A letter of agreement with Poland is expected to be signed later in 2017 for phase one of the Patriot deal, worth over $1 billion, and the order to be received in 2018. The initial agreement with Romania is also expected later in 2017 and will be worth several hundred million dollars initially, Kennedy said. There are also additional opportunities for Patriot sales in Europe, he said.

Kennedy also praised the Trump administration for its support of industry and pursuing international sales, saying it “changes the game.” The administration’s support for American companies overseas “opens several doors for us,” adding that while the company is already successful in generating international business, it is “accelerating our ability to grow internationally.”

When Raytheon competes oversea, it’s not against other companies, Kennedy said, it’s against “other countries,” which is why the administration’s support is important.

Based on year-to-date results and a lower than expected tax rate for 2017, Raytheon increased its outlook for sales, earnings and orders. Sales are projected to be between $25.1 billion and $25.6 billion, up $200 million from the prior outlook, per share earnings are pegged to be in the $7.35 to $7.45 range, a dime higher than the earlier forecast.

Bookings are now expected to be between $26 billion to $27 billion, $500 million higher than prior guidance, with about one-third to be international.

Lockheed Martin [LMT] said July 25 its Integrated Test Force Teams are successfully completing the requirements of the F-35 program’s System Development and Demonstration (SDD) phase.

In recent months, the company said it has completed testing for the F-35A’s final envelope involving risk ‘edge of the envelope’ maneuvers. This entails stressing the aircraft to its structural strength, vehicle systems performance, and aerodynamics limits while also providing “excellent handling qualities.”

The teams also completed all United Kingdom weapon delivery accuracy tests for the AIM-132, ASRAAM, and Paveway IV weapons. Lockheed Martin completed 45 of 50 SDD Weapon Delivery Accuracy tests including multiple target and multiple shot engagements as well as internal gun and centerline external pod 25 mm gun accuracy tests.

Another SDD activity was when the company performed multi-ship mission effectiveness tests, which includes Offensive Counter-Air and Maritime Interdiction. These tests demonstrated the performance of the F-35, Lockheed Martin said.

The remaining development flight testing will include validating the final release of 3F software, F-35B ski jump testing, F-35B austere site operations, high-MACH Loads testing for the F-35B and F-35C, and completion of remaining weapons delivery accuracy tests.

“We are well positioned to complete air vehicle full 3F and mission systems software development by the end of 2017,” Jeff Babione, Lockheed Martin executive vice president and F-35 Program General Manager, said in a statement.

The Government Accountability Office (GAO) earlier in 2017 said that the F-35 Joint Program Office estimates for completing the SDD testing for the 3F software configuration are overly optimistic based on historical precedent.

GAO estimated a 12-month delay for the 3F, based on previous flight-test data, which could cost over $1.7 billion. F-35 program officials disagreed and said they anticipated a five-month delay in SDD completion of 3F at a cost of $532 million.

Lockheed Martin also highlighted the F-35 has now exceeded 100,000 flight hours.

“This 100K milestone marks a significant level of maturity for the program and the F-35 weapons system,” Babione added.

A “tit-for-tat” response to Russia’s violation of the Intermediate-Range Nuclear Forces (INF)Treaty may not be the best option for the United States, Gen. John Hyten, commander of U.S. Strategic Command, said July 26 on a conference call with reporters during the Deterrence Symposium in Omaha, Neb.

U.S. officials have concluded that Russia deployed a ground-launched nuclear-capable cruise missile in breach of the INF Treaty, which prohibits ground-launched ballistic and cruise missiles with ranges of between 500 and 5,500 kilometers. The administration is preparing response options as part of its Nuclear Posture Review process, which it expects to complete by the end of 2017.

The House of Representatives earlier in July passed its version of the fiscal year 2018 National Defense Authorization Act (NDAA), calling for the U.S. to establish a program of record for an INF-range missile system; the White House has opposed this provision. Meanwhile, the Senate version of the legislation would authorize $65 million for research and development of such a missile – a measure the White House seems to support.

Hyten said that while the U.S. must respond to the Russian INF violation, “I’m of the mind that tit-for-tat responses, although useful, aren’t always the best response.”

“You have to look at the overall strategic situation and then respond strategically, and that may involve pursuing new capabilities, that may involve doing a number of different things, but it may involve political responses, it may involve economic responses,” he said.

Ultimately, Hyten said, “our desire is to be in the INF Treaty with the Russians and to be both in compliance.” Reaching this point, he added, is a matter for political leadership, but “I give my military recommendations when asked.”

The INF Treaty allows research and development of intermediate-range systems, which means the Defense Department could consider extending the range of existing missiles. The Trump administration could also choose to abandon the treaty while it develops its own ground-launched cruise missile, something many U.S. officials have cautioned against.

The House and Senate will need to reconcile their versions of the NDAA, including the INF provisions, before sending it to the president for signature.

A U.S. Navy coastal patrol ship fired warning shots at an Iranian naval vessel that was approaching it in an unsafe manner, U.S. Central Command (CENTCOM) said on July 25.

The Iranian ship approached within 150 yards of the USS Thunderbolt (PC-12), a Cyclone-class patrol ship during coalition exercises in the Persian Gulf. CENTCOM said the Iranian vessel did not respond to repeated attempts to establish radio communication as it approached.

The Navy called the Iranian ship’s actions as “unsafe and unprofessional interaction” occurring in international waters.

When the vessel did not respond to communication, the Thunderbolt fired warning flares and sounded an internationally-recognized danger signal consisting of five short blasts on the ship whistle. Navy officials said the Iranian ship continued approaching anyway and the Thunderbolt crew again fired the warning blasts before firing warning shots in front of the vessel.

The Navy said after that the Iranian vessel halted its approach. The Navy said the Iran ship’s actions were not in accordance with internationally known “rules of the road” or recognized maritime customs. This created a risk of collision, CENTCOM said.

The Thunderbolt was conducting the exercise with two Coast Guard cutters, an Army logistics ship, and the USS Vella Gulf (CG-72) Ticonderoga-class guided missile cruiser.

In a video first obtained by USNI News a watch stander refers to the Iranian ship as an Iranian Revolutionary Guard Corps Navy (IRGCN) vessel. The IRGC is separate from the rest of Iran’s military, and directly reports to the country’s leadership.

The IRGC claimed in a statement released to the state-run Fars News Agency that the U.S. ship was sailing towards the IRGCN patrol ship. The IRGCN said it “was patrolling in international waters, and fired two shots into the air with the aim of provocation and intimidation.”

The IRGCN frequently conducts provocative actions against U.S. and allied naval vessels in the Persian Gulf. In June, an Iranian vessel trained a laser on a U.S. helicopter accompanying a group of Navy ships transiting the Strait of Hormuz, in March an IRGCN patrol boat stopped short in front of the USNS Invincible (T-AGM-24), and in January the USS Mahan (DDG-72) fired three warning shots to ward off several IRGCN approaching it and other U.S. Navy ships transiting the strait.

The Thunderbolt is one of 10 PCs forward deployed to Manama, Bahrain and is assigned to Task Force 55. Forward based PCs conduct maritime security operations (MSO) in the northern Persian Gulf to protect Iraqi oil terminals and sea-based infrastructure as well as other counter-terrorism operations.

PC ships are armed with two MK38 chain guns, two Mk19 automatic grenade launchers, and two .50 caliber machine guns.