Raytheon Co. on Thursday lifted its 2015 sales forecast and
expects its defense business to return to growth a year earlier
than expected, boosted by sales of missile defense systems and a
recent cybersecurity acquisition.
The Pentagon's fourth-largest supplier by revenue reported
forecast-beating second-quarter profits, and although full-year
earnings' guidance was narrowed following May's $1.6 billion deal
to acquire control of Websense, said it was more optimistic about
the deal's financial impact.
"It's not as dilutive as we thought," Chief Financial Officer
Toby O'Brien said in an interview, with the unit reporting a loss
of $1 million for the quarter.
The company trimmed its 2015 earnings guidance to a range of to
$6.47 to $6.62 from $6.67 to $6.82 to reflect the Websense deal,
ahead of analysts' expectations, and also boosted its share buyback
plan.
Raytheon is a closely watched barometer of the industry's health
because of its relatively large overseas exposure, a run of
domestic contract wins and efforts to tap commercial as well as
core defense markets. Most peers expect revenues to fall
sequentially again this year, returning to growth in 2016.
The company raised its 2015 sales guidance by $400 million, with
Austin, Texas-based Websense expected to add an extra $100 million
and the unit that builds the Patriot missile-defense system
boosting revenue by an additional $300 million.
Patriot sales helped lift revenues by 2.8% to $5.85 billion in
the quarter, with $7.6 billion in orders boosting its book-to-bill
ratio to 1.3.
Income from continuing operations rose to $504 million from $499
million, with per-share earnings climbing to $1.65 from $1.59,
above analysts' expectations.
The Websense deal has made Raytheon an industry outlier with its
push to marry prowess in government cybersecurity with increasing
demand from the commercial sector. Peers such as Boeing Co. and
General Dynamics Corp. are eschewing commercial business such as
banks and utilities because of intense competition, and Lockheed
Martin Corp. this week announced plans to sell or spin off its
commercial cyber unit.
Write to Doug Cameron at doug.cameron@wsj.com
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