Raytheon’s quarterly revenue rises on higher weapon demand
US manufacturer reports fourth-quarter sales increase across its five segments, led by the missile systems unit
Washington — Tomahawk missile maker Raytheon reported an 8.5% rise in fourth-quarter revenue on Thursday, boosted by higher demand for its weapons from the US and its allies.
Raytheon reported higher sales across its five segments, led by its missile systems unit, where sales rose 6% to about $2.32bn. The increase was driven by higher sales from “classified programmes”, for which the company does not provide detailed numbers.
Waltham, Massachusetts-based Raytheon and other US weapons makers are expected to benefit from strong global demand for fighter jets and munitions as well as higher US defence spending in financial 2020.
Operating margin in the missile systems unit, which makes Paveway smart bombs and advanced medium-range air-to-air missiles, fell to 11.8% in the quarter ended December 31 from 12.7% a year earlier, due to a change in mix.
The US weapons maker forecast 2019 profit in the range of $11.40 to $11.60 per share, which came in below analysts’ average estimate of $11.78 per share, according to IBES data from Refinitiv.
Rivals Lockheed Martin and General Dynamics also forecast their 2019 profit below analysts’ estimates this week.
Raytheon also said operating cash flow from continuing operations is expected to be in the range of $3.9bn to $4.1bn in 2019, compared with $3.4bn in the previous year. But the mid-point of the forecast fell short of analysts’ average estimate of about $4.1bn.
The company expects 2019 net sales to range between $28.6bn and $29.1bn, marginally below analysts’ average expectation of $29.01bn, according to Refinitiv data.
Revenue in the quarter rose to $7.36bn from $6.78bn a year earlier.
Raytheon’s net income attributable to the company jumped to $832m, or $2.93 per share, in the quarter, compared with $393m, or $1.35 per share, a year earlier, benefiting from lower taxes related to the US tax overhaul.
Sales at the space and airborne systems unit, which makes electronic warfare systems for tactical aircraft, helicopters and ships, rose 12.6% to $1.88bn, but operating margins fell to 13.9% from 14.5%.
Reuters