Raytheon ship-defense missile passes key test

The USS John Paul Jones launches a Standard Missile-6 last year. A test on July 28 of a modified Standard Missile-6 was successful.

U.S. Navy 2014

Shares in defense contractor Raytheon Co. rose sharply Thursday after the company reported second-quarter profits and sales that beat analysts’ expectations.

The Waltham, Massachusetts-based company — parent of Tucson-based Raytheon Missile Systems — reported quarterly net income of $505 million, or $1.65 per share, compared with earnings of $551 million or $1.76 per share in second-quarter 2014.

The parent company’s second-quarter results included several adjustments, including a gain of 29 cents per share from a favorable tax settlement, partly offset by an accounting adjustment of 9 cents per share related to Raytheon’s recent acquisition of the cybersecurity firm Websense.

Analysts surveyed by Zacks Investment Research expected second-quarter earnings of $1.63 per share.

Raytheon posted revenue of $5.85 billion in the period, beating analysts’ estimates of $5.43 billion.

Raytheon cut its projection of full-year earnings to between $6.47 to $6.62 per share, to reflect expected expenses related to its new cybersecurity venture, but the company boosted its 2015 revenue projection to a range of $22.7 billion to $23.2 billion.

The company’s shares closed Thursday at $103.21, up more than 6 percent, in trading on the New York Stock Exchange.

Raytheon shares declined 10 percent this year through June, while the Standard & Poor’s 500 index rose nearly 3 percent, but the stock has rebounded since early July.

At Raytheon Missile Systems, second-quarter net sales rose 1 percent to $1.56 billion while operating income fell 4 percent to $183 million.

During the quarter, Missile Systems booked $529 million for Standard Missile-3 interceptors for the Missile Defense Agency, $511 million for Evolved SeaSparrow Missiles for the Navy and international customers, $363 million for Paveway guided-bomb kits for international customers, and $143 million for the Standard Missile-6 ship-defense missile for the U.S. Navy.

Companywide, Raytheon’s bookings rose nearly 12 percent to $7.58 billion.

“Our strategy to position the company for global growth is delivering results, which are reflected in the strong bookings and sales growth in the second quarter, as well as our improved growth outlook for 2015,” Thomas A. Kennedy, Raytheon chairman and CEO, said in prepared remarks.

Senior reporter covering business and technology for the Arizona Daily Star/Tucson.com