WALTHAM, Mass.—Raytheon Co. said Thursday that third-quarter profit fell 31 percent on a smaller tax benefit and lower sales in some of its defense-contracting businesses.
The Waltham, Mass., company raised its profit forecast but cut its revenue guidance for 2011.
Congress and the Obama administration have agreed to cut federal spending by $1.5 trillion over the next decade, but if Democrats and Republicans can't agree on details, they will trigger automatic deep spending cuts in defense.
For the quarter ended Oct. 2, Raytheon's third-quarter net income fell to $501 million, or $1.43 per share, from $728 million, or $1.94 per share, a year earlier.
Raytheon said that excluding special items, it would have earned $1.39 per share, compared with $1.35 per share on the same basis a year ago. The company got a favorable tax settlement of 17 cents per share in the third quarter, but a benefit of 45 cents per share in the same quarter last year.
Revenue fell 2.2 percent, to $6.13 billion.
Analysts expected adjusted earnings of $1.33 per share on revenue of $6.38 billion, according to FactSet.
Sales and operating income fell at Raytheon's integrated defense business on lower international sales of Patriot missiles and a U.S. Navy program. Results also slid at the network-systems unit due to lower sales to the U.S. Army.
Sales rose 2 percent and operating income gained 11 percent at the missile-systems unit. Sales rose at the space and airborne systems unit on sales of surveillance equipment, but operating income fell.
The company raised its forecast for full-year profit, excluding special charges, to between $5.55 and $5.65 per share, up from $5.50 to $5.65 per share. With the lower third-quarter sales in some key units, Raytheon lowered its 2011 revenue outlook to between $25 billion and $25.3 billion from a July prediction of between $25.5 billion and $25.9 billion.
Analysts had expected 2011 adjusted earnings of $5.02 per share on revenue of $25.76 billion.
The shares rose 45 cents, or 1 percent, to $42.89 in late morning trading.