Raytheon Company Earnings: Beats Forecasts

S&P 500 (NYSE:SPY) component Raytheon Company (NYSE:RTN) reported net income above Wall Street’s expectations for the fourth quarter. Raytheon provides electronics, mission systems integration and other capabilities to customers in defense, homeland security and other government markets throughout the world.

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Raytheon Company Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the aerospace/defense company rose to $546 million ($1.58 per share) vs. $499 million ($1.25 per share) in the same quarter a year earlier. This marks a rise of 9.4% from the year earlier quarter.

Revenue: Fell 6.4% to $6.44 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: RTN reported adjusted net income of $1.74 per share. By that measure, the company beat the mean estimate of $1.34 per share. It fell short of the average revenue estimate of $6.73 billion.

Quoting Management: “In a year of economic uncertainty, the Raytheon team focused on what we do best – ensuring customer success through program performance and product innovation,” said William H. Swanson, Raytheon’s Chairman and CEO. “Improved efficiencies and lower costs drove operating margin and earnings performance, while global demand for our affordable solutions resulted in strong orders.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 6 cents in the third quarter, by 7 cents in the second quarter, and by 29 cents in the first quarter.

Revenue has fallen in the past two quarters. In the third quarter, revenue declined 2.2% to $6.13 billion from the year earlier quarter.

The company’s cost of sales fell 8.7% from a year earlier to $5.03 billion. Last quarter, cost of sales was 78% or revenue versus 80% a year earlier.

Looking Forward: Over the past ninety days, the average estimate for the first quarter of the next fiscal year has fallen from $1.24 per share to $1.22, indicating that analysts are growing pessisimistic about the company’s performance next quarter. The average estimate for the fiscal year is $5.05 per share, a rise from $5 ninety days ago.

Competitors to Watch: The Boeing Company (NYSE:BA), Northrop Grumman Corp. (NYSE:NOC), General Dynamics Corp. (NYSE:GD), Lockheed Martin Corp. (NYSE:LMT), Kratos Defense & Security Solutions, Inc (NASDAQ:KTOS), ITT Corporation (NYSE:ITT), Rockwell Collins, Inc. (NYSE:COL), Honeywell Intl. Inc. (NYSE:HON), FLIR Systems, Inc. (NASDAQ:FLIR), and Alliant Techsystems Inc. (NYSE:ATK).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com