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Raytheon Company reported second-quarter 2017 adjusted earnings from continuing operations of $1.98 per share, beating the Zacks Consensus Estimate of $1.74 by 13.8%. The figure also improved 5.3% from $1.88 in the year-ago quarter.
The adjustment was done by excluding a one-time charge of 9 cents associated with the early retirement of debt.
Including the one-time item, the company reported earnings of $1.89 from continuing operations, down 21.5% year over year.
Operational Performance
The company’s second-quarter revenues of $6,281 million saw 4.2% year-over-year growth. The reported number also surpassed the Zacks Consensus Estimate of $6,226.5 million by 0.9%.
Raytheon’s bookings in the second quarter were $6,532 million compared with $7,103 million in the year-ago quarter, reflecting a decrease of 8%. Total backlog at the end of the quarter was $36.2 billion, down from $36.7 billion at 2016-end.
Total operating expenses increased 7.4% to $5,432 million. As a result, operating income of $849 million dropped 12.7% from $972 million a year ago.
Raytheon Company Price, Consensus and EPS Surprise
Integrated Defense Systems: The segment’s revenues grew 5% year over year to $1,462 million due to higher sales on an international early-warning radar program awarded in the prior quarter. Operating income decreased to $245 million from $376 million.
Intelligence, Information and Services: The segment’s revenues of $1,555 million were lower than the year-ago level of $1,587 million by 2%. Operating income in the reported quarter also dropped to $115 million from $120 million a year ago.
Missile Systems: Segment revenues grew 11% to $1,901 million from $1,706 million a year ago, driven by higher net sales on the Standard Missile-2 (SM-2), Standard Missile-3 (SM-3), and Paveway programs. Operating income inched up to $236 million from $233 million a year ago.
Space and Airborne Systems: Revenues in the quarter improved 4% year over year to $1,608 million, driven by higher net sales on a domestic classified program. Operating income improved 6% to $218 million due to a change in program mix and higher volume.
Forcepoint: This commercial cyber-security segment generated net sales of $138 million in the second quarter, up from $137 million a year ago. The joint-venture entity registered operating income of $2 million in the reported quarter, down from the year-ago figure of $10 million.
Financial Update
Raytheon ended the second quarter with cash and cash equivalents of $2,167 million, down from $3,303 million as of Dec 31, 2016. Long-term debt was $4,747 million, down from an outstanding debt of $5,335 million as of Dec 31, 2016.
Operating cash flow from continuing operations was $741 million in the quarter compared with $1,071 million in the year-ago quarter.
In the reported quarter, Raytheon repurchased 0.6 million shares of common stock for $100 million.
Guidance
Raytheon has raised its top and bottom-line full-year guidance. The company currently expects 2017 revenues in the range of $25.1–$25.6 billion, up from the prior guidance range of $24.9–$25.4 billion. It now expects earnings from continuing operations at around $7.35−$7.50 per share, up from the $7.25−$7.40 band.
Raytheon, however, continues to project 2017 operating cash flow from continuing operations at approximately $2.8−$3.1 billion.
Northrop Grumman Corporation (NOC - Free Report) reported second-quarter 2017 earnings of $3.15 per share, beating the Zacks Consensus Estimate of $2.84 by 10.9%. Reported earnings were also up 10.5% from $2.85 recorded in the year-ago quarter.
Textron Inc. (TXT - Free Report) reported second-quarter 2017 adjusted earnings from continuing operations of 60 cents per share, beating the Zacks Consensus Estimate of 55 cents by 9.1%.
The Boeing Company (BA - Free Report) reported adjusted earnings of $2.55 per share for second-quarter 2017, beating the Zacks Consensus Estimate of $2.32 by 9.9%. In the year-ago quarter, the company had reported a loss of 44 cents.
More Stock News: Tech Opportunity Worth $386 Billion in 2017
From driverless cars to artificial intelligence, we've seen an unsurpassed growth of high-tech products in recent months. Yesterday's science-fiction is becoming today's reality. Despite all the innovation, there is a single component no tech company can survive without. Demand for this critical device will reach $387 billion this year alone, and it's likely to grow even faster in the future.
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Image: Bigstock
Raytheon (RTN) Tops Q2 Earnings & Sales, Raises '17 View
Raytheon Company reported second-quarter 2017 adjusted earnings from continuing operations of $1.98 per share, beating the Zacks Consensus Estimate of $1.74 by 13.8%. The figure also improved 5.3% from $1.88 in the year-ago quarter.
The adjustment was done by excluding a one-time charge of 9 cents associated with the early retirement of debt.
Including the one-time item, the company reported earnings of $1.89 from continuing operations, down 21.5% year over year.
Operational Performance
The company’s second-quarter revenues of $6,281 million saw 4.2% year-over-year growth. The reported number also surpassed the Zacks Consensus Estimate of $6,226.5 million by 0.9%.
Raytheon’s bookings in the second quarter were $6,532 million compared with $7,103 million in the year-ago quarter, reflecting a decrease of 8%. Total backlog at the end of the quarter was $36.2 billion, down from $36.7 billion at 2016-end.
Total operating expenses increased 7.4% to $5,432 million. As a result, operating income of $849 million dropped 12.7% from $972 million a year ago.
Raytheon Company Price, Consensus and EPS Surprise
Raytheon Company Price, Consensus and EPS Surprise | Raytheon Company Quote
Segmental Performance
Integrated Defense Systems: The segment’s revenues grew 5% year over year to $1,462 million due to higher sales on an international early-warning radar program awarded in the prior quarter. Operating income decreased to $245 million from $376 million.
Intelligence, Information and Services: The segment’s revenues of $1,555 million were lower than the year-ago level of $1,587 million by 2%. Operating income in the reported quarter also dropped to $115 million from $120 million a year ago.
Missile Systems: Segment revenues grew 11% to $1,901 million from $1,706 million a year ago, driven by higher net sales on the Standard Missile-2 (SM-2), Standard Missile-3 (SM-3), and Paveway programs. Operating income inched up to $236 million from $233 million a year ago.
Space and Airborne Systems: Revenues in the quarter improved 4% year over year to $1,608 million, driven by higher net sales on a domestic classified program. Operating income improved 6% to $218 million due to a change in program mix and higher volume.
Forcepoint: This commercial cyber-security segment generated net sales of $138 million in the second quarter, up from $137 million a year ago. The joint-venture entity registered operating income of $2 million in the reported quarter, down from the year-ago figure of $10 million.
Financial Update
Raytheon ended the second quarter with cash and cash equivalents of $2,167 million, down from $3,303 million as of Dec 31, 2016. Long-term debt was $4,747 million, down from an outstanding debt of $5,335 million as of Dec 31, 2016.
Operating cash flow from continuing operations was $741 million in the quarter compared with $1,071 million in the year-ago quarter.
In the reported quarter, Raytheon repurchased 0.6 million shares of common stock for $100 million.
Guidance
Raytheon has raised its top and bottom-line full-year guidance. The company currently expects 2017 revenues in the range of $25.1–$25.6 billion, up from the prior guidance range of $24.9–$25.4 billion. It now expects earnings from continuing operations at around $7.35−$7.50 per share, up from the $7.25−$7.40 band.
Raytheon, however, continues to project 2017 operating cash flow from continuing operations at approximately $2.8−$3.1 billion.
Zacks Rank
Raytheon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Peer Releases
Northrop Grumman Corporation (NOC - Free Report) reported second-quarter 2017 earnings of $3.15 per share, beating the Zacks Consensus Estimate of $2.84 by 10.9%. Reported earnings were also up 10.5% from $2.85 recorded in the year-ago quarter.
Textron Inc. (TXT - Free Report) reported second-quarter 2017 adjusted earnings from continuing operations of 60 cents per share, beating the Zacks Consensus Estimate of 55 cents by 9.1%.
The Boeing Company (BA - Free Report) reported adjusted earnings of $2.55 per share for second-quarter 2017, beating the Zacks Consensus Estimate of $2.32 by 9.9%. In the year-ago quarter, the company had reported a loss of 44 cents.
More Stock News: Tech Opportunity Worth $386 Billion in 2017
From driverless cars to artificial intelligence, we've seen an unsurpassed growth of high-tech products in recent months. Yesterday's science-fiction is becoming today's reality. Despite all the innovation, there is a single component no tech company can survive without. Demand for this critical device will reach $387 billion this year alone, and it's likely to grow even faster in the future.
Zacks has released a brand-new Special Report to help you take advantage of this exciting investment opportunity. Most importantly, it reveals 4 stocks with massive profit potential.
See these stocks now>>