Raytheon's (RTN) Q4 Earnings Surpass Estimates, Sales Up Y/Y

LMT TXT TDY

Raytheon Company reported fourth-quarter 2019 earnings per share (EPS) of $3.16 from continuing operations, outpacing the Zacks Consensus Estimate of $3.11 by 1.6%. The bottom-line figure also improved 7.8% from the year-ago quarter’s $2.93 owing to operational improvements.

For 2019, Raytheon’s earnings came in at $11.92 per share, which surpassed the Zacks Consensus Estimate of $11.88 by 0.33%. The 2019 bottom-line figure also improved 17.4% from the prior-year number.

Operational Performance

Raytheon's fourth-quarter sales of $7,842 million grew 6.5% on a year-over-year basis. The top line, however, fell short of the Zacks Consensus Estimate of $8,028 million by 2.3%.

For 2019, Raytheon generated sales of $29.18 billion, which marginally missed the Zacks Consensus Estimate of $29.35 billion by 0.58%. However, on a year-over-year basis, full-year sales improved 7.8%.

The company’s bookings totaled $12,058 million compared with $8,447 million in the year-ago quarter, reflecting a surge of 42.7%. Total backlog at the end of 2019 was $48.75 billion, up 14.9% from the previous year’s figure.

Total operating expenses increased 6.8% to $6,563 million. The company’s operating income of $1,279 million rose 5.4% year over year.

Raytheon Company Price, Consensus and EPS Surprise

Segmental Performance

Integrated Defense Systems: Sales at this segment grew 18% year over year to $1,981 million, driven by higher net sales from an international air and missile defense system program and an international missile defense radar program. Meanwhile, operating income in the reported quarter also grew 24% to $307 million from $247 million a year ago.

Intelligence, Information and Services: Sales at this segment totaled $1,742 million, higher than the year- ago level of $1,711 million by 2%. Operating income in the reported quarter also improved 3% to $149 million

from $144 million a year ago.

Missile Systems: Revenues at this segment grew 1% to $2,345 million from $2,317 million a year ago, owing to higher net sales on classified programs in 2019. Moreover, operating income improved 9% to $297 million from $273 million in the year-ago quarter.

Space and Airborne Systems: At this segment, revenues grossed $2,018 million that witnessed 7% growth from the year-ago quarter. This upside was driven by increased net sales from classified programs, Next Generation Overhead Persistent Infrared (Next Gen OPIR) program and tactical communication system programs. Also, operating income rose 6% to $278 million on higher volumes.

Forcepoint: This commercial cybersecurity segment generated net revenues of $177 million in the fourth quarter, up 2.9% from $172 million a year ago.

Moreover, operating income in the reported quarter surged 200% to $6 million from $2 million a year ago.

Financial Update

Raytheon ended 2019 with cash and cash equivalents of $4,292 million, up from $3,608 million as of Dec 31, 2018.

Long-term debt summed $3,261 million, as of Dec 31, 2019, down from $4,755 million, as of Dec 31, 2018.

 

Net cash inflow from operating activities amounted to $4,480 million in 2019 compared with $3,428 million in 2018.

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

Teledyne Technologies Inc. (TDY - Free Report) reported fourth-quarter 2019 adjusted earnings of $2.90 per share, which surpassed the Zacks Consensus Estimate of $2.76 by 5.1%. The bottom-line figure came above the guided range of $2.71-$2.76.

Lockheed Martin Corp. (LMT - Free Report) reported fourth-quarter 2019 earnings of $5.29 per share, which surpassed the Zacks Consensus Estimate of $4.99 by 6%. The bottom line also improved 20.5% from $4.39 in the year-ago quarter.

Textron Inc. (TXT - Free Report) reported fourth-quarter 2019 adjusted earnings of $1.11 per share, which surpassed the Zacks Consensus Estimate of $1.08 by 2.8%. The bottom line, however, declined 3.5% from $1.15 in the year-ago quarter.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>

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 >>