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  • Feb 4th, 2005
  • Comments Off on Raytheon profit up on military spending
Defence contractor Raytheon Co on Thursday said quarterly profit rose a better-than-expected 20 percent, helped by higher spending on its Patriot missile systems and other military products. The Waltham, Massachusetts-based maker of planes, weapons and radar systems stood by its full-year profit forecast, in line with Wall Street's estimate, despite expecting higher pension costs. Its shares rose 1.5 percent in early trade.

Raytheon reported fourth-quarter net profit of $245 million, or 54 cents per share, compared with $205 million, or 49 cents per share, in the year-ago quarter.

Profit from continuing operations was also 54 cents per share, above the 46 cents Wall Street expected, according to analysts polled by Reuters Estimates.

The results were helped by an upgrade on Patriot missile systems sold to Japan, while the aircraft division, which makes Hawker and Beech jets, was helped by profits from its T-6A training aircraft.

Raytheon delivered 142 aircraft in the quarter, up from 120 in the same quarter a year ago; but bookings for new aircraft dipped to 173 from 189 a year ago.

Lower taxes also boosted profits, with Raytheon reaping a $42 million benefit from a change in the US tax law that extends the carry-forward period of foreign tax credits. Profit was cut by 13 cents per share, the company said, by a charge for higher pension costs.

"They did better than anticipated," said Paul Nisbet at JSA Research, which specializes in analysing aerospace and defence stocks. "Every part of its business contributed. If the pension expenses had been reversed, their earnings would have been way above consensus."

Raytheon's revenue rose 12 percent to $5.7 billion in the quarter, beating analysts estimate of $5.5 billion.

The company's total backlog of work for its government and defence businesses rose to $29.6 billion, up from $25.1 billion a year ago. Looking forward, Raytheon repeated its forecast of full-year earnings per share from continuing operations of $1.80 to $1.90. Wall Street expects $1.88, on average.

Raytheon shares rose 52 cents, to $38.32, in early trade on the New York Stock Exchange.

Copyright Reuters, 2005


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