Jan 31 () - Tomahawk missile maker Raytheon Co reported an 8.5 percent rise in fourth-quarter revenue on Thursday, boosted by higher demand for its weapons, but a conservative 2019 profit forecast sent shares down.
Shares were down about 5 percent to $163 in pre-market trading.
The U.S. weapons maker forecast 2019 profit in the range of $11.40 to $11.60 per share, which came in below analysts' average estimate of $11.78 per share, according to IBES data from Refinitiv.
Raytheon also said operating cash flow from continuing operations is expected to be in the range of $3.9 billion to $4.1 billion in 2019, compared with $3.4 billion in the previous year. But the mid-point of the forecast fell short of analysts' average estimate of about $4.1 billion.
Raytheon reported higher sales across its five segments, led by its missile systems unit, where sales rose 6 percent to about $2.32 billion. The increase was driven by higher sales from 'classified programs', for which the company does not provide detailed numbers.
Waltham, Massachusetts-based Raytheon and other U.S. weapons makers are expected to benefit from strong global demand for fighter jets and munitions as well as higher U.S. defense spending in fiscal 2020.
Operating margin in the missile systems unit, which makes Paveway smart bombs and advanced medium-range air-to-air missiles, fell to 11.8 percent in the quarter ended Dec. 31 from 12.7 percent a year earlier, due to a change in mix.
The company expects 2019 net sales to range between $28.6 billion and $29.1 billion, marginally below analysts' average expectation of $29.01 billion, according to Refinitiv data.
Revenue in the quarter rose to $7.36 billion from $6.78 billion a year earlier.
Raytheon's net income attributable to the company jumped to $832 million, or $2.93 per share, in the quarter, compared with $393 million, or $1.35 per share, a year earlier, benefiting from lower taxes related to the U.S. tax overhaul.
Sales at the space and airborne systems unit, which makes electronic warfare systems for tactical aircraft, helicopters and ships, rose 12.6 percent to $1.88 billion, but operating margins fell to 13.9 percent from 14.5 percent.
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