Raytheon raises full-year forecast after profit increases 10 percent
Raytheon Co., the world’s largest missile maker, raised its full-year profit forecast after second-quarter net income increased 9.8 percent.
Profit from continuing operations will be $5.15 to $5.30 a share compared with an earlier forecast of $5 to $5.15 a share made in April, the Waltham-based company said in a statement.
Net income from continuing operations increased in the quarter to $472 million, or $1.41 a share, compared with $430 million, or $1.20 a share, a year earlier, Raytheon said. Excluding certain items, profit was $1.55 a share, exceeding the $1.22-a-share average estimate of 21 analysts surveyed by Bloomberg. Sales declined 3.4 percent to $5.99 billion.
Raytheon fell less than 1 percent to $55.08 Wednesday in New York trading and has gained 14 percent this year.
Chairman and chief executive Bill Swanson is counting on the company’s variety of products and services as well as international business to weather US defense spending cuts that may reach $1 trillion over the next decade. Foreign sales were 25 percent of Raytheon’s revenue at the end of the first quarter.
The Pentagon plans to cut about $490 billion from planned spending over a decade, and an additional $500 billion in automatic defense cuts known as sequestration will go into effect starting in January unless lawmakers and the White House agree on an alternative deficit-reduction plan.
Unlike other defense contractors such as Lockheed Martin Corp. and Northrop Grumman Corp. whose executives have said the budget cuts would lead to employees being fired and profit and cash flow being squeezed, Raytheon has said it is flexible enough to operate under such budget cuts.
With the company’s information-technology systems capable of wringing out costs and managing suppliers, “we are prepared to operate in any type of environment,” chief financial officer Dave Wajsgras said in a phone interview in April.
The quarter’s results were aided by higher sales and profit in Raytheon’s space and airborne systems unit. Operating income at four of five units increased during the quarter, Raytheon said. Sales at the network-centric systems unit fell 15 percent and profit declined 28 percent because of weak orders from the US Army and a lower volume of orders overall, the company said.