Raytheon Co.'s (RTN) fourth-quarter earnings rose 18% as the defense company benefited from lower costs, though it reported broadly weaker sales.
For the year, the company projected per-share earnings of $5.45 to $5.60 on revenue $24.5 billion to $25 billion. Analysts polled by Thomson Reuters recently expected $5.23 and $25.13 billion, respectively.
Raytheon and other defense companies have been diversifying into growing areas such as cybersecurity and seeking international growth in response to lean U.S. defense spending. Raytheon in November won approval from the U.S. Congress and the State Department to upgrade Saudi Arabia's missile-defense system, in a deal valued at $1.7 billion.
The space and airborne systems segment, which includes Applied Signal Technology Inc., which it acquired early last year, was the only segment to see sales growth in the latest period, up 3%, while segment operating earnings grew 31%.
Raytheon reported a profit of $543 million, or $1.57 a share, up from $459 million, or $1.25 a share, a year earlier. The latest period included a penny loss from discontinued operations, while the prior-year loss was 11 cents. Excluding pension and early debt retirement impacts, earnings were up at $1.74 from $1.55.
Revenue decreased 6.4% to $6.44 billion. Analysts polled by Thomson Reuters most recently projected earnings of $1.34 on revenue of $6.73 billion. The latest period had five fewer workdays.
Gross margin rose to 22% from 20% on lower costs. Operating expenses were down 8.2%.
Bookings were up at $7.1 billion, from $5.98 billion a year earlier. Backlog at year's end rose to $35.31 billion from $34.55 billion.
Sales of missiles, its largest segment by revenue, fell 5% though segment operating profit improved by 23%.
Shares closed Wednesday at $49.71 and were inactive premarket. The stock is up roughly %2.8 this year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com