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Raytheon (RTN) Q1 Earnings Top Estimates on Higher Y/Y Sales
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Raytheon Company reported first-quarter 2019 earnings per share (EPS) of $2.77 from continuing operations, which surpassed the Zacks Consensus Estimate of $2.45 by 13.1%. The bottom line also improved a solid 25.9% from $2.20 registered in the year-ago quarter.The year-over-year improvement was driven by operational improvements and pension-related items.
Operational Performance
Raytheon's first-quarter sales of $6,729 million increased 7.4% year over year and also exceeded the Zacks Consensus Estimate of $6,581 million by 2.2%. The company’s bookings totaled $5,368 million compared with $6,311 million in the year-ago quarter, reflecting a decline of 14.9%. Total backlog, at the end of first-quarter 2019, was $41.1 billion, up 8% from the previous year’s figure.
Total operating expenses increased 7.5% to $5,616 million. The company’s operating income of $1,113 million rose 6.9% year over year.
Raytheon Company Price, Consensus and EPS Surprise
Integrated Defense Systems: Sales at this segment grew 4% year over year to $1,550 million driven by higher net sales on various Patriot programs and a naval radar program. Meanwhile, operating income dropped 5% to $258 million on account of change in mix and other performance.
Intelligence, Information and Services: Sales at this segment totaled $1,777 million, up 12% from $1,582 million recorded a year ago. The top-line improvement can be attributed to higher net sales on classified programs in both cyber and space.
Operating income in the reported quarter also improved 60% to $187 million from $117 million a year ago.
Missile Systems: Sales at this segment grew 9% to $2,006 million from $1,848 million a year ago increase in net sales across numerous programs. However, operating income dropped to $190 million from $212 million a year ago due to lower net program efficiencies and a change in program mix.
Space and Airborne Systems: At this segment, sales grossed $1,653 million, which increased 5% from the year-ago quarter number. This upside was driven by higher net sales on classified programs. Also, operating income rose 10% to $212 million on increased volume.
Forcepoint: This commercial cyber-security segment generated net revenues of $158 million in the first quarter, up 12% from $158 million a year ago.
Moreover, the joint-venture entity incurred an operating loss of $2 million compared to an operating loss of $7 million in the prior-year quarter.
Financial Update
Raytheon ended the first quarter with cash and cash equivalents of $2,093 million, up from $3,608 million as of Dec 31, 2018. Long-term debt summed $4,256 million, compared to $4,755 million as of Dec 31, 2018.
Operating cash outflow from operating activities amounted to $411 million at the end of first- quarter 2019 against cash inflow of $283 million at the end of first-quarter 2018.
Furthermore, Raytheon repurchased 2.8 million shares of common stock for $500 million in the quarter under review.
The company also increased the annual dividend rate by 8.6% from $3.47 to $3.77 per share, the fifteenth consecutive annual dividend increase.
2019 Guidance
Raytheon has reiterated its financial guidance for 2019. The company continues to expect earnings from continuing operations to come around $11.40-$11.60 per share. Currently, the Zacks Consensus Estimate for full-year earnings is pegged at $11.59, near the higher end of the company’s provided guidance.
Also, the company still expects revenues to be in the $28.6-$29.1 billion range. The Zacks Consensus Estimate for full-year revenues, pegged at $28.8 billion, lies near the mid-point of the company’s projected view.
Raytheon also continues to forecast its 2019 operating cash flow from continuing operations in the $3.9-$4.1 billion band.
Textron Inc. (TXT - Free Report) reported first-quarter 2019 earnings from continuing operations of 76 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 8.6%.
Lockheed Martin Corp. (LMT - Free Report) reported first-quarter 2019 earnings of $5.99 per share, which outshined the Zacks Consensus Estimate of $4.29 by 39.6%.
The Boeing Company (BA - Free Report) reported adjusted earnings of $3.16 per share for first-quarter 2019, which exceeded the Zacks Consensus Estimate of $3.11 by 1.6%.
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Raytheon (RTN) Q1 Earnings Top Estimates on Higher Y/Y Sales
Raytheon Company reported first-quarter 2019 earnings per share (EPS) of $2.77 from continuing operations, which surpassed the Zacks Consensus Estimate of $2.45 by 13.1%. The bottom line also improved a solid 25.9% from $2.20 registered in the year-ago quarter.The year-over-year improvement was driven by operational improvements and pension-related items.
Operational Performance
Raytheon's first-quarter sales of $6,729 million increased 7.4% year over year and also exceeded the Zacks Consensus Estimate of $6,581 million by 2.2%.
The company’s bookings totaled $5,368 million compared with $6,311 million in the year-ago quarter, reflecting a decline of 14.9%. Total backlog, at the end of first-quarter 2019, was $41.1 billion, up 8% from the previous year’s figure.
Total operating expenses increased 7.5% to $5,616 million. The company’s operating income of $1,113 million rose 6.9% year over year.
Raytheon Company Price, Consensus and EPS Surprise
Raytheon Company Price, Consensus and EPS Surprise | Raytheon Company Quote
Segmental Performance
Integrated Defense Systems: Sales at this segment grew 4% year over year to $1,550 million driven by higher net sales on various Patriot programs and a naval radar program. Meanwhile, operating income dropped 5% to $258 million on account of change in mix and other performance.
Intelligence, Information and Services: Sales at this segment totaled $1,777 million, up 12% from $1,582 million recorded a year ago. The top-line improvement can be attributed to higher net sales on classified programs in both cyber and space.
Operating income in the reported quarter also improved 60% to $187 million from $117 million a year ago.
Missile Systems: Sales at this segment grew 9% to $2,006 million from $1,848 million a year ago increase in net sales across numerous programs. However, operating income dropped to $190 million from $212 million a year ago due to lower net program efficiencies and a change in program mix.
Space and Airborne Systems: At this segment, sales grossed $1,653 million, which increased 5% from the year-ago quarter number. This upside was driven by higher net sales on classified programs. Also, operating income rose 10% to $212 million on increased volume.
Forcepoint: This commercial cyber-security segment generated net revenues of $158 million in the first quarter, up 12% from $158 million a year ago.
Moreover, the joint-venture entity incurred an operating loss of $2 million compared to an operating loss of $7 million in the prior-year quarter.
Financial Update
Raytheon ended the first quarter with cash and cash equivalents of $2,093 million, up from $3,608 million as of Dec 31, 2018. Long-term debt summed $4,256 million, compared to $4,755 million as of Dec 31, 2018.
Operating cash outflow from operating activities amounted to $411 million at the end of first- quarter 2019 against cash inflow of $283 million at the end of first-quarter 2018.
Furthermore, Raytheon repurchased 2.8 million shares of common stock for $500 million in the quarter under review.
The company also increased the annual dividend rate by 8.6% from $3.47 to $3.77 per share, the fifteenth consecutive annual dividend increase.
2019 Guidance
Raytheon has reiterated its financial guidance for 2019. The company continues to expect earnings from continuing operations to come around $11.40-$11.60 per share. Currently, the Zacks Consensus Estimate for full-year earnings is pegged at $11.59, near the higher end of the company’s provided guidance.
Also, the company still expects revenues to be in the $28.6-$29.1 billion range. The Zacks Consensus Estimate for full-year revenues, pegged at $28.8 billion, lies near the mid-point of the company’s projected view.
Raytheon also continues to forecast its 2019 operating cash flow from continuing operations in the $3.9-$4.1 billion band.
Zacks Rank
Raytheon currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Textron Inc. (TXT - Free Report) reported first-quarter 2019 earnings from continuing operations of 76 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 8.6%.
Lockheed Martin Corp. (LMT - Free Report) reported first-quarter 2019 earnings of $5.99 per share, which outshined the Zacks Consensus Estimate of $4.29 by 39.6%.
The Boeing Company (BA - Free Report) reported adjusted earnings of $3.16 per share for first-quarter 2019, which exceeded the Zacks Consensus Estimate of $3.11 by 1.6%.
Radical New Technology Creates $12.3 Trillion Opportunity
Imagine buying Microsoft stock in the early days of personal computers… or Motorola after it released the world’s first cell phone. These technologies changed our lives and created massive profits for investors.
Today, we’re on the brink of the next quantum leap in technology. 7 innovative companies are leading this “4th Industrial Revolution” - and early investors stand to earn the biggest profits.
See the 7 breakthrough stocks now>>