Raytheon Earnings Cheat Sheet: After Four Straight Increases, Revenue Drops as Net Income Falls

S&P 500 (NYSE:SPY) component Raytheon Company (NYSE:RTN) reported its results for the third 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 Third Quarter

Results: Net income for Raytheon Company fell to $501 million ($1.43 per share) vs. $728 million ($1.94 per share) a year earlier. This is a decline of 31.2% from the year earlier quarter.

Revenue: Fell 2.2% to $6.13 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: RTN reported adjusted net income of $1.39 per share. By that measure, the company beat the mean estimate of $1.33 per share. It fell short of the average revenue estimate of $6.38 billion.

Quoting Management: “Our continued focus on delivering affordable and innovative solutions to our customers is highlighted by robust third quarter bookings,” said William H. Swanson, Raytheon’s Chairman and CEO. “Solid execution and cost reduction efforts drove strong operating margin and cash flow performance in the quarter.”

Key Stats:

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the second quarter, which saw revenue rise 4.2%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 7 cents in the second quarter, by 29 cents in the first quarter, and by 41 cents in the fourth quarter of the last fiscal year.

Net income has increased 21.1% year over year on average across the last five quarters. The biggest gain came in the second, when income climbed more than twofold from the year earlier quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from $1.43 a share to $1.39 over the last ninety days. The average estimate for the fiscal year is $5 per share, a rise from $4.89 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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(Source: Xignite Financials)