Raytheon (RTN, $213.38) tops Q3 earnings and revenue estimates

Raytheon Company beat both earnings and revenue expectations for third quarter, with most of its business segments experiencing positive growth.

The U.S. defense contractor and industrial corporation’s  third-quarter 2019 earnings of $3.08 per share from continuing operations exceeded analysts’ expectation of $2.85 (the Zacks Consensus Estimate). The bottom line grew + 36.9% from the year-ago quarter.

Raytheon's third-quarter sales rose +9.4% year over year to $7,446 million surpassing the Zacks Consensus Estimate of $7,260 million.

The company’s bookings increased +8.4% year-over-year to $9,439 million in the quarter. As of the end of third-quarter 2019, total backlog was $44.61 billion, +3.5% higher from the previous quarter’s figure.

The company’s operating income of $1,206 million rose +1.9% year-over-year.

Raytheon’s sales from Integrated Defense Systems segment increased +18% year-over-year, on the back of higher net sales from an international air and missile defense system program. The segment’s operating income rose +17% year over year for the quarter.

Sales from the Intelligence, Information and Services segment rose + 6%, and its operating income improved +8%.

Sales from the Space and Airborne Systems segment were up +14%, while the segment’s operating income rose +22%.

Missile Systems segment registered sales growth of +4%. But the segment’s operating income fell - 15% due to lower net program efficiencies.

Net revenues at Forcepoint (commercial cyber-security segment) fell -3%. Operating income of $14 million was also lower from the year-ago quarter’s $18 million.

Looking ahead, Raytheon partially raised its guidance for full-year earnings per share from continuing operations to the range of $11.70-$11.80 (vs. prior guidance of $11.50-$11.70 ). The Zacks Consensus Estimate for full-year earnings currently sits at at $11.73, which is lower than the midpoint of the company’s projected range.

For the full-year, the company hiked its revenues guidance to a range of $29.1-$29.4 billion (vs. prior guidance of $28.8-$29.3 billion). The Zacks Consensus Estimate for full-year revenues is $29.08 billion, which is lower than the mid-point of the company’s forecast range.

Raytheon re-iterated its 2019 operating cash flow from continuing operations forecast in the range of $4-$4.2 billion.

Contributor

Sergey Savastiouk|Expert

Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.