WALTHAM, Mass. - Raytheon Co., parent of Tucson-based Raytheon Missile Systems, said Thursday that its first-quarter profit grew 9 percent as the defense contractor cut costs, and it raised its earnings outlook for the year.
Despite a revenue drop, the Waltham, Mass.-based company earned $488 million, or $1.49 per share, in the three months that ended March 31, compared with $448 million, or $1.32 per share, in the same quarter a year ago.
Stripping out the effect of a pension-related charge and a research and development federal tax credit that was extended in January, profit came to $1.56 per share. That's above the $1.28 per share Wall Street analysts were expecting, according to research firm FactSet.
Revenue fell about 1 percent, to $5.88 billion from $5.94 billion. Analysts expected a steeper drop, to $5.69 billion. A 1 percent decline in costs, to $5.17 billion, helped protect profit despite the revenue drop.
Profits rose 7.2 percent at Tucson-based Missile Systems and its integrated defense-systems unit, but fell in its other divisions. The company benefited from landing more international business, said Citi analyst Jason Gursky.
The company updated its outlook for the year to reflect what it expects will happen to its business due to the government's automatic spending cuts, which went into effect in March.
It cut its revenue outlook to a range of $23.2 billion to $23.7 billion, from its January view of $23.6 billion to $24.1 billion. But it lifted its adjusted profit outlook for the year by 10 cents, to $5.75 to $5.90 per share.
Analysts project profit of $5.32 per share on revenue of $23.8 billion.
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Raytheon Missile Systems, Southern Arizona's largest private employer, had first-quarter 2013 net sales of $1.45 billion, up 8 percent compared to $1.35 billion in the first quarter of 2012.
The increase in net sales was primarily driven by higher sales on the Standard Missile-3 (SM-3) and Rolling Airframe Missile (RAM) programs.
Missile Systems recorded $193 million of operating income compared with $180 million in the first quarter of 2012, an increase of 7.2 percent.
The increase in operating income was due to higher volume on U.S. Navy programs in the first quarter of 2013.
During the quarter, Missile Systems booked $156 million for the production of RAM for the German Navy and $85 million on Miniature Air-Launch Decoy for the U.S. Air Force.