"Raytheon booked nearly $20 billion of awards, resulting in a book-to-bill [ratio] in Q2 [second quarter of the 2026 fiscal year] of 2.4[%]," Christopher Calio, President and CEO of Raytheon (now formally called RTX), said on today’s call.
Christopher Calio’s earnings call and the first domestic GEM‑T order in 30 years
Calio told investors that Raytheon's recent bookings included "over $5 billion of GEM‑T Patriot effectors, driven by international customers, and our first domestic GEM‑T production order in over 30 years." That line on the company’s July earnings call appears to reference a U.S. Army award earlier this year. The Army quietly issued a contract — valued at $441.6 million in one account and described elsewhere as a $442 million contract modification — on April 30, 2026, for PATRIOT PAC‑2 GEM‑T missiles in support of Operation Epic Fury.
What the PAC‑2 GEM‑T is and why it matters
GEM‑T stands for Guidance Enhanced Missile‑Tactical. The GEM‑T configuration is the only PAC‑2 variant still in production today and has been upgraded over time. Raytheon began producing the baseline Guidance Enhanced Missile (GEM), also designated the MIM‑104D, in the mid‑1990s; these were later modernized to GEM+ and redesignated MIM‑104E after refurbishment. The GEM‑T name originally described MIM‑104Es rebuilt from MIM‑104Ds and optimized against tactical ballistic missiles — precisely the threat the source material says is driving demand for Patriot interceptors.
Supply strain: how combat and global demand pushed the Army to buy older interceptors
The new U.S. GEM‑T order came amid intense global demand for Patriot systems and interceptors, driven by fighting in the Middle East and the war in Ukraine. Patriot interceptors have been heavily used by the U.S. Army, Israel, Gulf Arab states, and Ukraine, especially against ballistic missile barrages. A May report from the Center for Strategic and International Studies estimated U.S. Patriot interceptor expenditures related to operations against Iran this year at roughly 1,060 to 1,430 missiles, a figure not broken down between PAC‑2 and PAC‑3 variants. These operational pressures, plus long lead times for production, are part of the reason U.S. authorities have moved to purchase GEM‑T interceptors anew.
Industry responses and production ramps
Raytheon has not only highlighted the domestic GEM‑T order but has expanded production overseas, establishing a GEM‑T production facility in Germany with MBDA Deutschland. Lockheed Martin, the prime contractor for the PAC‑3 family, has separately been working to ramp up PAC‑3 production and on July 20, 2026 unveiled a lower‑cost PAC‑3 variant called the Adapted Capability Effector (ACE). The source notes Lockheed also warned Germany, Japan, Poland, the United Arab Emirates, and Saudi Arabia about potential uncertainty surrounding PAC‑3 deliveries. Switzerland’s Patriot deliveries were deferred last year due to demand from Ukraine, and Swiss authorities in April raised the prospect of canceling the deal because of those delays.
What this means for the U.S. Army, international partners, and defense manufacturers
- U.S. Army: The Army has added GEM‑T purchases to its stocks while continuing to seek a new interceptor compatible with Patriot priced at no more than $1 million per unit; by contrast, the Army’s FY2027 budget cited a $5.3 million unit price for the PAC‑3 MSE. The Army must also respond to a House Armed Services Committee request for a briefing, due no later than March 1, 2027, detailing Patriot interceptor inventories, capabilities and limitations of PAC‑2 and PAC‑3, planned deliveries, and recommendations to address shortfalls.
- International partners (Ukraine, Israel, Gulf states): These customers will continue to strain global supply, especially for GEM‑T and PAC‑3 interceptors optimized against ballistic threats; President Donald Trump has said he will grant Ukraine a license to domestically produce PAC‑2 and/or PAC‑3 interceptors, though the source notes any such production is years away at best.
- Manufacturers (Raytheon/RTX and Lockheed Martin): Both primes are pursuing capacity expansions and lower‑cost variants to meet competing demand. Raytheon’s GEM‑T bookings and new German production line, and Lockheed’s PAC‑3 ACE and production ramp, are immediate industry responses to supply pressures identified in the source material.
The Army’s April contract and Raytheon’s earnings‑call revelation are concrete markers of a broader problem the source frames as a munitions supply‑chain crisis: heavy operational use, high global demand, and long production lead times. Whether the GEM‑T missiles from the April award are solely for U.S. military use or include allied purchases is unclear in the record. Delivery timing is also unspecified; PAC‑2 and PAC‑3 interceptors are long‑lead items and typically take years from contract award to delivery.
For now, the first U.S. GEM‑T order in decades is both a stopgap and a signal — that American authorities are turning to older, still‑produced interceptors to replenish stocks while industry races to scale up newer and cheaper designs. The House committee’s requested briefing by March 1, 2027, will be a concrete checkpoint for tracking how quickly those efforts can change the calculus.
Source: TWZ — U.S. Army Is Buying Older PAC‑2 Patriot Missiles For The First Time In Decades
