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Raytheon (RTN) Beats on Q3 Earnings, Raises '18 EPS Guidance


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Raytheon Company RTN reported third-quarter 2018 earnings per share (EPS) from continuing operations of $2.25, beating the Zacks Consensus Estimate of $1.94 by 16%. The bottom line figure improved 14.2% from the year-ago quarter's figure of $1.97.

Operational Performance

Raytheon's third-quarter revenues of $6,806 million increased 8.3% on a year-over-year basis. The reported number also surpassed the Zacks Consensus Estimate of $6,673 million by 2%.

The company's bookings totaled $8,710 million compared with $6,957 million in the year-ago quarter, reflecting a surge of 25.2%. Total backlog at the end of the quarter was $41.6 billion, up 8.9% from the previous year's figure.

Total operating expenses increased 9.1% to $5,623 million. The company's operating income of $1,183 million rose 4.9% from $1,128 million a year ago.

Raytheon Company Price, Consensus and EPS Surprise

Raytheon Company Price, Consensus and EPS Surprise | Raytheon Company Quote

Segmental Performance

Integrated Defense Systems : Revenues at this segment grew 7% year over year to $1,493 million, driven by higher net sales from an international Patriot program awarded in the first quarter of 2018. Operating income increased to $241 million from $231 million.

Intelligence, Information and Services : Revenues at this segment totaled $1,742 million, higher than the year-ago level of $1,543 million by 13%. The top-line improvement can be attributed to higher net sales on classified programs in both cyber and space business areas, the Development, Operations and Maintenance (DOMino) cyber program, and the Warfighter FOCUS program.

Operating income in the reported quarter also improved to $149 million from $112 million a year ago.

Missile Systems : Revenues at this segment grew 7% to $2,082 million from $1,945 million a year ago owing to higher net sales on classified programs. Operating income dropped to $257 million from $280 million a year ago.

Space and Airborne Systems : At this segment, revenues grossed $1,695 million that witnessed a 6% growth from the year-ago quarter number. This upside was driven by higher net sales on surveillance and targeting systems program. Operating income rose 5% to $223 million owing to increased volume.

Forcepoint : This commercial cyber-security segment generated net revenues of $173 million in the third quarter, up from $170 million a year ago. Moreover, the joint-venture entity registered operating income of $18 million compared with $23 million in the prior-year's quarter.

Financial Update

Raytheon ended the third quarter with cash and cash equivalents of $2,073 million, down from $3,103 million as of Dec 31, 2017. Long-term debt was $4,753 million, marginally up from an outstanding debt of $4,750 million as of Dec 31, 2017.

Operating cash outflow from operating activities summed $444 million in the quarter, against cash inflow of $382 million in the year-ago quarter.

In the reported quarter, Raytheon repurchased 0.6 million shares of common stock for $125 million.

2018 Guidance  

Raytheon has raised its full-year guidance for the top and bottom lines. The company currently expects 2018 revenues in the range of $27.0-$27.3 billion, up from $26.7-$27.2 billion projected earlier. It now expects earnings from continuing operations of around $10.01-$10.11 per share, up from the $9.77-$9.97 band.

Raytheon, however, continues to forecast its 2018 operating cash flow from continuing operations from in the range of $2.6-$3 billion.

Zacks Rank

Raytheon currently carries a Zacks Rank #2 (Buy). You can see  the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Recent Defense Releases

Textron TXT reported third-quarter 2018 adjusted earnings from continuing operations of 61 cents per share, which missed the Zacks Consensus Estimate of 76 cents by 19.7%. The bottom line also decreased 6.2% from 65 cents in the year-ago quarter.

Boeing BA reported adjusted earnings of $3.58 per share for third-quarter 2018, beating the Zacks Consensus Estimate of $3.45 by 3.8%. The bottom line reflected an improvement of 36.6% from $2.62 in the year-ago quarter.

Teledyne Technologies TDY reported adjusted third-quarter 2018 earnings of $2.23 per share, beating the Zacks Consensus Estimate of $2.05 by 8.8%. The bottom line also improved 26% from the year-ago quarter's figure of $1.77.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Earnings , Stocks
Referenced Symbols: BA , TDY , TXT , RTN



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