Defense contractor Raytheon Co. on Thursday posted higher third-quarter revenues and profits, led by a 10 percent sales increase at its Tucson-based Missile Systems business.
The Waltham, Massachusetts-based company also reported strong bookings and raised its full-year earnings estimate, but its shares fell after it missed analysts’ revenue estimates.
Raytheon reported net sales of $6.28 billion in the third quarter, up 4.5 percent from third quarter of 2016 but just shy of analysts’ expectations of $6.33 billion, according to Zack’s Investment Service.
The company posted third quarter net income from continuing operations of $573 million, or $1.97 per share, up 5.5 percent from a year ago and topping the average analyst estimate of $1.90 per share.
Raytheon shares fell Thursday to $181.86, down 4 percent, in trading on the New York Stock Exchange. But the stock is still up more than 20 percent for the year to date.
Tucson-based Raytheon Missile Systems, one of the company’s five reporting business units, posted net sales of $1.95 billion, up from $1.77 billion in the third quarter of 2016, mainly on higher sales of its Paveway guided-bomb kits and Excalibur GPS-guided artillery shells.
Missile Systems reported third quarter operating income of $280 million, up 19 percent from a year ago, mainly driven by higher efficiencies and increased volume.
Major third-quarter bookings for the missile unit included $492 million for the Redesigned Kill Vehicle program for the Missile Defense Agency; $427 million for “a number of classified contracts”; $348 million for TOW (Tube-launched, Optically-tracked, Wireless-guided) missiles; $206 million for Paveway; $145 million for Tomahawk cruise missiles; $136 million for Excalibur; and $102 million for Standard Missile-3 ballistic missile interceptors.
The increase in the third-quarter earnings was driven mainly by operational improvements, Raytheon said.
“We delivered strong bookings and solid operating performance in the third quarter,” Raytheon Chairman and CEO Thomas A. Kennedy said in prepared remarks. “Global customer demand drove an increase in our backlog, which positions us well for continued growth in 2018.”
Raytheon said its backlog at the end of the third quarter was $36.7 billion, up about $950 million from the third quarter of 2016.
The company upped its full-year earnings projection to a range of $7.45 to $7.55 per share, up from its earlier guidance of $7.35 to $7.50 per share, while narrowing its revenue estimate slightly, to between $25.3 billion and $25.6 billion.