Raytheon Co. on Thursday reported a forecast-beating 5% rise in
quarterly profits and lifted its 2014 guidance, completing a clean
sweep of outperformance by the top five U.S. defense
contractors.
The Pentagon's third-largest supplier continued its strong order
intake, buoyed by a market-leading position in international sales,
notably of its Patriot antimissile system. Bookings of $5.9 billion
in the quarter lifted its book-to-bill ratio to 1.07.
Raytheon's stock has lagged behind peers this year, in part
because of delays in completing some large international deals and
a recent record of matching or only narrowly beating consensus
forecasts.
The company reported net profit of $519 million for the quarter
to Sept. 28 compared with $493 million a year earlier, with
per-share earnings rising to $1.66 from $1.52. Adjusted per-share
earnings that exclude some pension effects dipped to $1.57 from
$1.60.
Sales again dropped at all four of its divisions, slipping to
$5.47 billion from $5.84 billion a year earlier, with two units
also reporting lower margins than a year ago.
The company lifted the bottom end of its 2014 revenue now $22.7
billion to $23 billion but favorable tax changes helped counter the
negative impact of recent pension regulations. Raytheon lifted its
guidance for adjusted per-share earnings to a range of $5.91 to
$6.01 from July's $5.76 to $5.91 forecast.
U.S. defense executives this quarter remain split on whether
Pentagon procurement spending has bottomed, but efficiency gains,
stock buybacks and pension tailwinds have helped the sector
outperform the broader market.
Lockheed Martin Corp, Boeing Co. General Dynamics Corp. and
Northrop Grumman Corp. all this week reported higher-than expected
quarterly profits and lifted their 2014 guidance.
Raytheon shares closed Wednesday at $97.45, and are up 7.4% this
year.
Write to Doug Cameron at doug.cameron@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires