Tax gain boosts Raytheon profit

Raytheon Co. today said fourth-quarter earnings jumped 64 percent, due in part to a $214 million gain from a tax benefit, as well more streamlined operations and lower interest and pension expenses.

The world's fifth-largest defense contractor also raised its earnings expectations for 2008.

Waltham, Mass.-based Raytheon said net income for the October-December period rose to $598 million, or $1.37 per share, up from $365 million, or 81 cents per share, in the previous year's fourth quarter. Sales rose 8 percent to $6 billion, up from $5.56 billion in the year-ago period.

The latest quarter included a $214 million gain from a previously disclosed refund involving research and development tax claims stemming from the 1984 to 1990 period.

The quarter also included an after-tax loss of $36 million, or 8 cents per share, from discontinued operations.

Excluding that charge, Raytheon's income from continuing operations was $634 million, or $1.45 per share, compared with $344 million, or 76 cents per share, in the year-ago period.

The company attributed the increase to operational improvements, lower net interest and pension expenses, as well as tax-related benefits.

The 72,000-employee company also updated its financial outlook for this year. Raytheon now expects earnings from continuing operations to total $3.65 to $3.80 per year on sales of $22.4 billion to $22.9 billion. In October, Raytheon had forecast a 2008 profit of $3.45 to $3.65 a share on net sales of $22.1 billion to $22.6 billion. (AP)