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Raytheon shares surge after 3Q results top Wall Street forecasts

Raytheon shares surge after 3Q results top Wall Street forecasts

Raytheon Missile Systems

Raytheon is one of the nation’s biggest defense contractors and the Tucson region’s biggest employer.

Shares in defense contractor Raytheon Co. surged Thursday after the company posted third-quarter results that topped Wall Street expectations and raised its guidance for the year.

The parent of Tucson-based Raytheon Missile Systems reported third-quarter revenue of $7.45 billion, up 9.4% from the same quarter in 2018.

Raytheon, which will merge with United Technologies Corp. next year pending regulatory approvals, posted quarterly net income from continuing operations of $861 million, or earnings per share of $3.08.

That was up from earnings per share of $2.25 in third-quarter 2018, when the company recorded a pension transaction that cut earnings by 80 cents per share.

Wall Street analysts surveyed by Zacks Investment Research had estimated earnings of $2.85 per share on revenue of $7.26 billion.

Raytheon shares closed Thursday at $211.39 per share, up $7.84 or about 4%, in trading on the New York Stock Exchange.

Among Raytheon’s five business units, Missile Systems reported third-quarter net sales of $2.17 billion, up 4% from third-quarter 2018, on higher booked sales on classified programs, its Phalanx ship-defense gun system, Tomahawk cruise missile, Evolved SeaSparrow missile and Paveway guided bomb kits.

But Missile Systems reported a 15% drop in operating income, to $219 million, “primarily due to lower program efficiencies,” Raytheon said.

The company’s Integrated Defense Systems unit posted third-quarter net sales of $1.76 billion, up 18% from third-quarter 2018, mainly driven by international sales of air and missile defense systems, while operating income rose 17% to $282 million.

Raytheon also upped its expectations for 2019, projecting full-year earnings from $11.70 to $11.80 per share, with revenue in the range of $29.1 billion to $29.4 billion.

Contact senior reporter David Wichner at dwichner@tucson.com or 573-4181. On Twitter: @dwichner.

On Facebook: Facebook.com/DailyStarBiz

Reporter

David joined the Star in 1997, after working as a consumer and business reporter in Phoenix for more than a decade. A graduate of Ohio University, he has covered most business beats focusing on technology, defense and utilities. He has won several awards.

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