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Raytheon (RTN) Q1 Earnings Top Estimates on Higher Y/Y Sales


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Raytheon Company RTN reported first-quarter 2019 earnings per share (EPS) of $2.77 from continuing operations, which surpassed the Zacks Consensus Estimate of $2.45 by 13.1%. The bottom line also improved a solid 25.9% from $2.20 registered in the year-ago quarter.The year-over-year improvement was driven by operational improvements and pension-related items.

Operational Performance

Raytheon's first-quarter sales of $6,729 million increased 7.4% year over year and also exceeded the Zacks Consensus Estimate of $6,581 million by 2.2%.
The company's bookings totaled $5,368 million compared with $6,311 million in the year-ago quarter, reflecting a decline of 14.9%. Total backlog, at the end of first-quarter 2019, was $41.1 billion, up 8% from the previous year's figure.

Total operating expenses increased 7.5% to $5,616 million. The company's operating income of $1,113 million rose 6.9% year over year.

Raytheon Company Price, Consensus and EPS Surprise

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

Segmental Performance

Integrated Defense Systems : Sales at this segment grew 4% year over year to $1,550 million driven by higher net sales on various Patriot programs and a naval radar program. Meanwhile, operating income dropped 5% to $258 million on account of change in mix and other performance.

Intelligence, Information and Services : Sales at this segment totaled $1,777 million, up 12% from $1,582 million recorded a year ago. The top-line improvement can be attributed to higher net sales on classified programs in both cyber and space.

Operating income in the reported quarter also improved 60% to $187 million from $117 million a year ago.

Missile Systems : Sales at this segment grew 9% to $2,006 million from $1,848 million a year ago increase in net sales across numerous programs. However, operating income dropped to $190 million from $212 million a year ago due to lower net program efficiencies and a change in program mix.

Space and Airborne Systems : At this segment, sales grossed $1,653 million, which increased 5% from the year-ago quarter number. This upside was driven by higher net sales on classified programs. Also, operating income rose 10% to $212 million on increased volume.

Forcepoint: This commercial cyber-security segment generated net revenues of $158 million in the first quarter, up 12% from $158 million a year ago.

Moreover, the joint-venture entity incurred an operating loss of $2 million compared to an operating loss of $7 million in the prior-year quarter.

Financial Update

Raytheon ended the first quarter with cash and cash equivalents of $2,093 million, up from $3,608 million as of Dec 31, 2018. Long-term debt summed $4,256 million, compared to $4,755 million as of Dec 31, 2018.

Operating cash outflow from operating activities amounted to $411 million at the end of first- quarter 2019 against cash inflow of $283 million at the end of first-quarter 2018.

Furthermore, Raytheon repurchased 2.8 million shares of common stock for $500 million in the quarter under review.

The company also increased the annual dividend rate by 8.6% from $3.47 to $3.77 per share, the fifteenth consecutive annual dividend increase.

2019 Guidance  

Raytheon has reiterated its financial guidance for 2019. The company continues to expec t earnings from continuing operations to come around $11.40-$11.60 per share. Currently, the Zacks Consensus Estimate for full-year earnings is pegged at $11.59, near the higher end of the company's provided guidance.

Also, the company still expects revenues to be in the $28.6-$29.1 billion range. The Zacks Consensus Estimate for full-year revenues, pegged at $28.8 billion, lies near the mid-point of the company's projected view.

Raytheon also continues to forecast its 2019 operating cash flow from continuing operations in the $3.9-$4.1 billion band.

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 Inc. TXT reported first-quarter 2019 earnings from continuing operations of 76 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 8.6%.

Lockheed Martin Corp. LMT reported first-quarter 2019 earnings of $5.99 per share, which outshined the Zacks Consensus Estimate of $4.29 by 39.6%.

The Boeing Company BA reported adjusted earnings of $3.16 per share for first-quarter 2019, which exceeded the Zacks Consensus Estimate of $3.11 by 1.6%.

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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: LMT , BA , TXT , RTN



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