Raytheon Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Raytheon (NYSE:RTN) will unveil its latest earnings on Thursday, October 25, 2012. Raytheon provides electronics, mission systems integration and other capabilities to customers in defense, homeland security and other government markets throughout the world.

Raytheon Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of $1.27 per share, a decline of 8.6% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $1.29. Between one and three months ago, the average estimate moved down. It also has dropped from $1.28 during the last month. Analysts are projecting profit to rise by 9.7% compared to last year’s $5.33.

Past Earnings Performance: Last quarter, the company beat estimates by 20 cents, coming in at profit of $1.41 a share versus the estimate of net income of $1.21 a share. It marked the fourth straight quarter of beating estimates.

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A Look Back: In the second quarter, profit rose 7.5% to $471 million ($1.41 a share) from $438 million ($1.23 a share) the year earlier, exceeding analyst expectations. Revenue fell 3.7% to $5.99 billion from $6.22 billion.

Stock Price Performance: Between September 21, 2012 and October 19, 2012, the stock price dropped $2.24 (-3.9%), from $58.11 to $55.87. The stock price saw one of its best stretches over the last year between December 14, 2011 and December 29, 2011, when shares rose for 11 straight days, increasing 9.2% (+$4.15) over that span. It saw one of its worst periods between May 7, 2012 and May 18, 2012 when shares fell for 10 straight days, dropping 7% (-$3.74) over that span.

Analyst Ratings: There are mostly holds on the stock with 11 of 18 analysts surveyed giving that rating.

Key Stats:

This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Net income rose 18.3% in the fourth quarter of the last fiscal year and 16.7% in the first quarter before increasing again in the second quarter.

On the top line, the company is hoping to use this earnings announcement to snap a string of four-straight quarters of revenue decreases. Revenue fell 2.2% in the third quarter of the last fiscal year, 6.4% in fourth quarter of the last fiscal year and 2% in the first quarter and then fell again in the second quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.62 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term.

Wall St. Revenue Expectations: Analysts predict a rise of 0.5% in revenue from the year-earlier quarter to $6.16 billion.

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

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