Raytheon Reports Solid Third Quarter Results, Revises Fourth Quarter Expectations

Raytheon CompanyRTN

reported its third quarter results on Thursday morning. The company earned $1.65 per share, topping the consensus estimate by five cents while revenue of $5.47 billion fell short of what analysts were expecting by $140 million. Net income for the quarter rose to $515 million from $489 million in the same quarter despite a 6.3 percent drop in revenue.

Segment Breakdown
Integrated Defense Systems revenue fell 11 percent from a year ago to $1.43 billion. The decrease was attributed to the scheduled completion of production phases on certain international Patriot programs. Operating income for the segment fell 20 percent to $230 million. Intelligence, Information and Services revenue dipped one percent from a year ago to $1.48 billion but the segment's operating income fell seven percent to $125 million due to higher net program efficiencies in the quarter. Missile Systems revenue fell ten percent from a year ago to $1.48 billion due to lower sales on U.S. Army programs and a planned transition from development to production on the Standard Missile-3 program. Operating income fell six percent to $190 million. Finally, Space and Airborne Systems revenue dipped three percent from a year ago to $1.51 billion, however operating income improved six percent to $237 million due to improved program performance.

Outlook

Raytheon updated its financial outlook for fiscal 2014. The company raised the lower end of its revenue guidance to $22.7 billion from $22.5 billion while maintaining the upper level of guidance at $23.0 billion. Earnings per share for the full fiscal year is expected to be $6.77 to $6.87. The company previously projected its earnings to be $6.74 to $6.89. Shares of Raytheon were trading slightly higher by 0.77 percent Thursday afternoon.

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