Raytheon Company reported first-quarter 2018 earnings from continuing operations of $2.20 per share, beating the Zacks Consensus Estimate of $2.10 by 4.8%. The reported figure also came in higher than the year-ago quarter’s earnings of $1.73 per share by 27.2%.
The year-over-year upside in earnings was driven by operational improvements and lower taxes.
Operational Performance
The company’s first-quarter revenues of $6,267 million witnessed 4.5% year-over-year growth. The reported number also surpassed the Zacks Consensus Estimate of $6,173.2 million by 1.5%.
Raytheon’s bookings in the first quarter were $6,311 million compared with $5,688 million in the year-ago quarter, reflecting a rise of 11%. Total backlog at the end of first-quarter was $38.1 billion, compared to $38.2 billion at the end of 2017.
Total operating expenses increased 3.4% to $5,226 million in the first quarter. Operating income of $1,041 million improved 9.8% from $1,041 million a year ago.
Segmental Performance
Integrated Defense Systems: The segment’s revenues grew 7% year over year to $1,489 million due to higher sales from an international Patriot program awarded in the first quarter 2018. Operating income increased to $273 million from $212 million.
Intelligence, Information and Services: The segment’s revenues of $1,582 million were higher than the year-ago level of $1,507 million by 5%, on account of higher net sales on classified and training programs. Operating income in the reported quarter increased to $117 million from $111 million a year ago.
Missile Systems: Segment revenues grew 5% to $1,848 million from $1,756 million a year ago, driven by higher net sales on classified programs. Operating income declined to $212 million from $216 million a year ago.
Space and Airborne Systems: Revenues in the quarter inched up 1% to $1,568 million. Operating income rose 2% to $193 million.
Forcepoint: This commercial cyber-security segment generated net sales of $141 million in the first quarter, down from $144 million a year ago. The joint-venture entity incurred operating loss of $7 million in the quarter, as against the year-ago operating income figure of $16 million.
Financial Update
Raytheon ended first-quarter with cash and cash equivalents of $2,748 million, down from $3,103 million as of Dec 31, 2017. Long-term debt was $4,751 million, almost in line with $4,750 million as of Dec 31, 2017.
Operating cash inflow from continuing operations was $283 million at the end of first quarter compared with cash outflow of $41 million in the year-ago quarter.
In the quarter under review, Raytheon repurchased 1.9 million shares of common stock for $400 million. Moreover, the company has hiked the annual dividend rate by 8.8% to $3.47 per share, which marked the 14th consecutive annual dividend increase.
Guidance
Raytheon raised its guidance for 2018. The company currently expects to generate net sales in the range of $26.5-$27.0 billion, compared to earlier band of $26.4 to $26.9 billion, in 2018.
On the bottom-line front, Raytheon now expects to deliver earnings per share in the range of $9.70-$9.90, up from prior range of $9.55-$9.75. The company however reiterated its cash flow from operating activities guidance in the range of $3.6-$4 billion during 2018.
Zacks Rank
Raytheon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Recent Peer Release
Boeing (BA - Free Report) reported adjusted earnings of $3.64 per share for first-quarter 2018, beating the Zacks Consensus Estimate of $2.59 by 40.5%. The quarterly bottom line reflected an improvement of 68% from $2.17 in the year-ago quarter.
Lockheed Martin (LMT - Free Report) reported first-quarter 2018 earnings from continuing operations of $4.02 per share, which surpassed the Zacks Consensus Estimate of $3.35 by 20%. The earnings figure was higher than the year-ago figure of $2.69 per share, by 49%.
Textron (TXT - Free Report) reported first-quarter 2018 earnings from continuing operations of 72 cents per share, which surpassed the Zacks Consensus Estimate of 46 cents by 56.5%. Notably, the bottom line was up 94.6% from 37 cents in the year-ago quarter.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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Raytheon Company reported first-quarter 2018 earnings from continuing operations of $2.20 per share, beating the Zacks Consensus Estimate of $2.10 by 4.8%. The reported figure also came in higher than the year-ago quarter’s earnings of $1.73 per share by 27.2%.
The year-over-year upside in earnings was driven by operational improvements and lower taxes.
Operational Performance
The company’s first-quarter revenues of $6,267 million witnessed 4.5% year-over-year growth. The reported number also surpassed the Zacks Consensus Estimate of $6,173.2 million by 1.5%.
Raytheon’s bookings in the first quarter were $6,311 million compared with $5,688 million in the year-ago quarter, reflecting a rise of 11%. Total backlog at the end of first-quarter was $38.1 billion, compared to $38.2 billion at the end of 2017.
Total operating expenses increased 3.4% to $5,226 million in the first quarter. Operating income of $1,041 million improved 9.8% from $1,041 million a year ago.
Segmental Performance
Integrated Defense Systems: The segment’s revenues grew 7% year over year to $1,489 million due to higher sales from an international Patriot program awarded in the first quarter 2018. Operating income increased to $273 million from $212 million.
Intelligence, Information and Services: The segment’s revenues of $1,582 million were higher than the year-ago level of $1,507 million by 5%, on account of higher net sales on classified and training programs. Operating income in the reported quarter increased to $117 million from $111 million a year ago.
Missile Systems: Segment revenues grew 5% to $1,848 million from $1,756 million a year ago, driven by higher net sales on classified programs. Operating income declined to $212 million from $216 million a year ago.
Space and Airborne Systems: Revenues in the quarter inched up 1% to $1,568 million. Operating income rose 2% to $193 million.
Forcepoint: This commercial cyber-security segment generated net sales of $141 million in the first quarter, down from $144 million a year ago. The joint-venture entity incurred operating loss of $7 million in the quarter, as against the year-ago operating income figure of $16 million.
Financial Update
Raytheon ended first-quarter with cash and cash equivalents of $2,748 million, down from $3,103 million as of Dec 31, 2017. Long-term debt was $4,751 million, almost in line with $4,750 million as of Dec 31, 2017.
Operating cash inflow from continuing operations was $283 million at the end of first quarter compared with cash outflow of $41 million in the year-ago quarter.
In the quarter under review, Raytheon repurchased 1.9 million shares of common stock for $400 million. Moreover, the company has hiked the annual dividend rate by 8.8% to $3.47 per share, which marked the 14th consecutive annual dividend increase.
Guidance
Raytheon raised its guidance for 2018. The company currently expects to generate net sales in the range of $26.5-$27.0 billion, compared to earlier band of $26.4 to $26.9 billion, in 2018.
On the bottom-line front, Raytheon now expects to deliver earnings per share in the range of $9.70-$9.90, up from prior range of $9.55-$9.75. The company however reiterated its cash flow from operating activities guidance in the range of $3.6-$4 billion during 2018.
Zacks Rank
Raytheon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Recent Peer Release
Boeing (BA - Free Report) reported adjusted earnings of $3.64 per share for first-quarter 2018, beating the Zacks Consensus Estimate of $2.59 by 40.5%. The quarterly bottom line reflected an improvement of 68% from $2.17 in the year-ago quarter.
Lockheed Martin (LMT - Free Report) reported first-quarter 2018 earnings from continuing operations of $4.02 per share, which surpassed the Zacks Consensus Estimate of $3.35 by 20%. The earnings figure was higher than the year-ago figure of $2.69 per share, by 49%.
Textron (TXT - Free Report) reported first-quarter 2018 earnings from continuing operations of 72 cents per share, which surpassed the Zacks Consensus Estimate of 46 cents by 56.5%. Notably, the bottom line was up 94.6% from 37 cents in the year-ago quarter.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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