Raytheon profit beats estimates, raises 2019 forecast on higher weapons demand
By Mike Stone
Oct 24 (Reuters) - U.S. weapons maker Raytheon Company RTN.N reported better-than-expected third-quarter profit on Thursday and raised its full-year earnings and sales outlook, helped by higher demand for space programs, weapons and missile warning systems.
Shares were up 1% in premarket trading.
During an interview with Reuters on Thursday, Chief Financial Officer Toby O'Brien said higher profit margins due to timing were helpful in the quarter and that across the business units, "the segment margins of 12.1% exceeded our expectations."
O'Brien said the company maintained its revenue growth expectations of 6% to 8% in 2020.
Massachusetts-based Raytheon and other U.S. weapons makers are expected to benefit from the $733-billion defense bill for fiscal year 2020, which is about 2% higher from last year.
Sales of U.S. military equipment to foreign governments, however, declined slightly in the government's fiscal year ended Sept. 30
Revenue in Raytheon's space and airborne systems business, its second biggest, jumped 14.4% to $1.94 billion, boosted by higher sales from classified programs and Next Generation Overhead Persistent Infrared (Next Gen OPIR) missile warning program. Margins in the unit rose to 14% from 13.2%.
Sales in Raytheon's missile systems unit, which makes radar threat-countering high-speed anti-radiation missiles and rapid-fire, radar-guided guns for ships, rose 4% to $2.17 billion in the quarter ended Sept 29. But margins in the unit fell to 10.1% from 12.3%.
The company now expects 2019 net sales to be between $29.1 billion and $29.4 billion, up from its prior range of $28.8 billion to $29.3 billion.
Raytheon raised its full-year forecast for earnings per share from continuing operations to between $11.70 and $11.80, from $11.50 to $11.70.
Earnings from continuing operations rose to $3.08 per share in the quarter, from $2.25 per share, a year earlier.
Overall sales rose 9.4% to $7.45 billion.
Analysts on average had expected quarterly earnings of $2.86 per share on revenue of $7.28 billion, according to IBES data from Refinitiv.
(Reporting by Mike Stone in Washington, and Dominic Roshan K.L. and Ankit Ajmera in Bengaluru; Editing by Vinay Dwivedi and Bernadette Baum)
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