By Tess Stynes
Raytheon Co.'s (RTN) second-quarter earnings rose 3.6% as the
defense giant's modest revenue increase was driven by growth at its
integrated defense systems and missile systems businesses.
Shares were up 2.8% at $71.72 in premarket trading as adjusted
earnings and revenue beat expectations and Raytheon boosted its
2013 outlook. The stock hit a 14-year high of $70.55 intraday on
Wednesday.
For the year, the company raised its per-share earnings estimate
to $6 to $6.10 on revenue of $23.5 billion to $23.7 billion, from
its previous estimate for per-share profit of $5.75 to $5.90 and
revenue of $23.2 billion to $23.7 billion.
Raytheon said the updated guidance reflects its current
expectation for the effects of the budget cuts known as the the
sequester that went into force during March.
Defense sector revenue remains under pressure from weaker
defense spending. But so far, major defense firms have appeared to
continue riding out the wave of weakened Pentagon spending during
the second quarter. Earlier this week, defense majors Lockheed
Martin Corp. (LMT), General Dynamics Corp. (GD), Boeing Co. (BA)
and Northrop Grumman Corp. (NOC) all turned in quarterly results
that beat expectations, with three of those four companies raising
their 2013 guidance.
Raytheon reported a profit of $488 million, or $1.50 a share, up
from $471 million, or $1.41 a share, a year earlier. Excluding
pension-accounting adjustments, a tax credit and other items,
adjusted earnings were up at $1.64 from $1.57.
Revenue increased 2% to $6.12 billion as growth in its
integrated defense systems and missile systems businesses offset
declines at its intelligence and information systems and space and
airborne systems units.
Analysts polled by Thomson Reuters most recently projected
earnings of $1.30 on revenue of $5.8 billion.
Operating margin edged up to 12.5% from 12.4%.
Bookings fell 14% to $5.32 billion, and backlog was down at
$32.4 billion, compared with $33.92 billion a year earlier.
Write to Tess Stynes at tess.stynes@dowjones.com
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