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Raytheon posts higher earnings, raises outlook [The Arizona Daily Star, Tucson](Arizona Daily Star (Tucson) Via Acquire Media NewsEdge) Oct. 23--Raytheon Co., parent of Tucson-based Raytheon Missile Systems, posted lower third-quarter earnings on slipping sales, beating Wall Street estimates only with the help of non-recurring gains from pension accounting changes. But Raytheon raised its profit outlook, citing its growing international arms business and a strong backlog of contract bookings in the coming year. At Missile Systems, net sales fell 1 percent while operating income fell 7 percent. The parent company reported third-quarter net income from continuing operations of $515 million, or $1.65 per share, compared with earnings of $487 million and $1.51 on the same basis in the third quarter of 2013. That beat the average estimate of analysts, who expected earnings of $1.61 per share according to Zacks Investment Research. However, after an adjustment to exclude changes in pension accounting rules this year and last, earnings fell 5.6 percent to $488 million, or $1.57 a share, from $517 million and $1.60 in third-quarter 2013, the company said. The defense contractor posted net sales of $5.47 billion in the period, down 6.5 percent from third-quarter 2013 and falling short of analysts' estimates of $5.62 billion in revenue. Raytheon raised its outlook for 2014, projecting full-year earnings from continuing operations in the range of $6.77 to $6.87 per share, with revenue in the range of $22.7 billion to $23 billion, in line with Wall Street expectations. "Raytheon's solid third quarter operating results reflect strong program execution and our continued focus on operational efficiency," Thomas A. Kennedy, Raytheon's chairman and CEO, said in a news release. "Bookings strength across our broad portfolio of proven technology solutions positions the company well for the future." Raytheon's bookings -- representing contracts for which the company expects to record revenue -- for the first nine months of 2014 were $16.9 billion, up $2.3 billion in 2013. Missile Systems posted third-quarter 2014 net sales of $1.48 billion, down from $1.64 billion in the same period last year. Sales slipped mainly due to lower sales on U.S. Army programs and a planned transition from development to production on the Standard Missile-3 missile defense program, the company said. During the quarter, Missile Systems booked $263 million in contracts for Tomahawk cruise missiles for the U.S. Navy and the United Kingdom; $244 million for Phalanx ship-defense gun systems for the U.S. Navy and foreign allies, $149 million for co-production of the interceptor for Israel's Iron Dome rocket-defense system; $117 million for Talon laser-guided rockets for the United Arab Emirates; and $75 million for AIM-9X Sidewinder short-range air-to-air missiles for the U.S. Navy. Chief Financial Officer Dave Wajsgras told Bloomberg News that cost-cutting has helped the company maintain strong profitability in the face of defense-budget cuts. "The company for a while now has been focusing on overall productivity, strategic sourcing, footprint reduction and overall cost management," Wajsgras said in an interview. "There was certainly an increased focus as the pressure on defense budgets became meaningful four or five years ago." Raytheon has looked to increase foreign sales, which accounted for about 27 percent of revenue in 2013, up from more than 25 percent in 2012, according to data compiled by Bloomberg. Bloomberg News contributed to this report. Contact Assistant Business Editor David Wichner at 573-4181 or [email protected] ___ (c)2014 The Arizona Daily Star (Tucson, Ariz.) Visit The Arizona Daily Star (Tucson, Ariz.) at www.azstarnet.com Distributed by MCT Information Services |