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Raytheon Company reported first-quarter 2017 adjusted earnings from continuing operations of $1.73 per share, beating the Zacks Consensus Estimate of $1.61 by 7.5%. The figure also improved 21% from $1.43 in the year-ago quarter.
Operational Performance
The company’s first-quarter revenues of $6,000 million saw a 3.4% year-over-year growth. The reported number also surpassed the Zacks Consensus Estimate of $5,843 million by 2.7%.
Raytheon’s bookings in the first quarter were $5,688 million compared with $6,201 million in the year-ago quarter, reflecting a decrease of 8.3%. Total backlog at the end of the quarter was $36.1 billion, down from $36.8 billion at 2016-end.
Total operating expenses contracted 1.3% to $5,259 million. However, operating income of $741 million rose 20.9% from $613 million a year ago.
Segmental Performance
Integrated Defense Systems: The segment’s revenues grew 4.6% year over year to $1,398 million due to higher sales on an international early warning radar program awarded in the first quarter. Operating income increased 45.2% to $212 million, on the back of higher net program efficiencies and a favorable change in program mix.
Intelligence, Information and Services: The segment’s revenues of $1,507 million were lower than the year-ago level of $1,532 million. Operating income in the reported quarter rose 6.7% to $111 million from $104 million a year ago, primarily driven by a favorable change in program mix.
Missile Systems: Segment revenues grew to $1,756 million from $1,723 million a year ago. Operating income increased to $216 million from $192 million a year ago.
Space and Airborne Systems: Revenues in the quarter improved 7.6% year over year to $1,555 million. Operating income increased 13.8% to $190 million due to a change in program mix and higher volume.
Forcepoint: This commercial cyber-security segment generated net sales of $144 million in the first quarter, up from $139 million a year ago. The joint-venture entity registered operating income of $16 million in the reported quarter, down from the year-ago figure of $18 million.
Raytheon Company Price, Consensus and EPS Surprise
Raytheon ended the first quarter with cash and cash equivalents of $2,186 million, down from $3,303 million as of Dec 31, 2016. Long-term debt was $5,086 million, down from outstanding debt of $5,335 million as of Dec 31, 2016.
Operating cash outflow from continuing operations was $41 million in the quarter compared with cash inflow of $326 million in the year-ago quarter.
In the reported quarter, Raytheon repurchased 2.7 million shares of common stock for $400 million.
Guidance
Raytheon expects 2017 revenues in the range of $24.9 billion to $25.4 billion, up from the prior guidance range of $24.8 billion to $25.3 billion. It now expects earnings from continuing operations at around $7.25−$7.40 per share, up from the $7.20−$7.35 band.
The company still projects 2017 operating cash flow from continuing operations at approximately $2.8−$3.1 billion.
Peer Releases
Rockwell Collins Inc. reported financial results for second-quarter fiscal 2017 (ended Mar 31, 2017). The company’s adjusted earnings per share of $1.34 surpassed the Zacks Consensus Estimate of $1.31 by 2.3%. Reported earnings also grew 3.1% from $1.30 per share earned a year ago.
Pentagon’s prime contractor, Lockheed Martin Corp. (LMT - Free Report) reported first-quarter 2017 earnings from continuing operations of $3 per share, beating the Zacks Consensus Estimate of $2.76 by 8.7%. Earnings came in line with the year-ago period’s bottom line figure.
Textron Inc. (TXT - Free Report) reported first-quarter 2017 adjusted earnings from continuing operations of 46 cents per share in line with the Zacks Consensus Estimate.
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Raytheon (RTN) Beats Q1 Earnings Estimates, Ups '17 View
Raytheon Company reported first-quarter 2017 adjusted earnings from continuing operations of $1.73 per share, beating the Zacks Consensus Estimate of $1.61 by 7.5%. The figure also improved 21% from $1.43 in the year-ago quarter.
Operational Performance
The company’s first-quarter revenues of $6,000 million saw a 3.4% year-over-year growth. The reported number also surpassed the Zacks Consensus Estimate of $5,843 million by 2.7%.
Raytheon’s bookings in the first quarter were $5,688 million compared with $6,201 million in the year-ago quarter, reflecting a decrease of 8.3%. Total backlog at the end of the quarter was $36.1 billion, down from $36.8 billion at 2016-end.
Total operating expenses contracted 1.3% to $5,259 million. However, operating income of $741 million rose 20.9% from $613 million a year ago.
Segmental Performance
Integrated Defense Systems: The segment’s revenues grew 4.6% year over year to $1,398 million due to higher sales on an international early warning radar program awarded in the first quarter. Operating income increased 45.2% to $212 million, on the back of higher net program efficiencies and a favorable change in program mix.
Intelligence, Information and Services: The segment’s revenues of $1,507 million were lower than the year-ago level of $1,532 million. Operating income in the reported quarter rose 6.7% to $111 million from $104 million a year ago, primarily driven by a favorable change in program mix.
Missile Systems: Segment revenues grew to $1,756 million from $1,723 million a year ago. Operating income increased to $216 million from $192 million a year ago.
Space and Airborne Systems: Revenues in the quarter improved 7.6% year over year to $1,555 million. Operating income increased 13.8% to $190 million due to a change in program mix and higher volume.
Forcepoint: This commercial cyber-security segment generated net sales of $144 million in the first quarter, up from $139 million a year ago. The joint-venture entity registered operating income of $16 million in the reported quarter, down from the year-ago figure of $18 million.
Raytheon Company Price, Consensus and EPS Surprise
Raytheon Company Price, Consensus and EPS Surprise | Raytheon Company Quote
Financial Update
Raytheon ended the first quarter with cash and cash equivalents of $2,186 million, down from $3,303 million as of Dec 31, 2016. Long-term debt was $5,086 million, down from outstanding debt of $5,335 million as of Dec 31, 2016.
Operating cash outflow from continuing operations was $41 million in the quarter compared with cash inflow of $326 million in the year-ago quarter.
In the reported quarter, Raytheon repurchased 2.7 million shares of common stock for $400 million.
Guidance
Raytheon expects 2017 revenues in the range of $24.9 billion to $25.4 billion, up from the prior guidance range of $24.8 billion to $25.3 billion. It now expects earnings from continuing operations at around $7.25−$7.40 per share, up from the $7.20−$7.35 band.
The company still projects 2017 operating cash flow from continuing operations at approximately $2.8−$3.1 billion.
Peer Releases
Rockwell Collins Inc. reported financial results for second-quarter fiscal 2017 (ended Mar 31, 2017). The company’s adjusted earnings per share of $1.34 surpassed the Zacks Consensus Estimate of $1.31 by 2.3%. Reported earnings also grew 3.1% from $1.30 per share earned a year ago.
Pentagon’s prime contractor, Lockheed Martin Corp. (LMT - Free Report) reported first-quarter 2017 earnings from continuing operations of $3 per share, beating the Zacks Consensus Estimate of $2.76 by 8.7%. Earnings came in line with the year-ago period’s bottom line figure.
Textron Inc. (TXT - Free Report) reported first-quarter 2017 adjusted earnings from continuing operations of 46 cents per share in line with the Zacks Consensus Estimate.
Zacks Rank
Raytheon currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>