Raytheon Reports Strong Third Quarter 2017 Results


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Raytheon Company today announced net sales for the third quarter 2017 of $6.3 billion, up 4.5 percent compared to $6.0 billion in the third quarter 2016. Third quarter 2017 EPS from continuing operations was $1.97 compared to $1.84 in the third quarter 2016. The increase in the third quarter 2017 EPS from continuing operations was primarily driven by operational improvements.

Summary:

  • Bookings of $7.0 billion; backlog of $36.7 billion
  • Net sales of $6.3 billion, up 4.5 percent
  • EPS from continuing operations of $1.97
  • Operating cash flow from continuing operations of $382 million
  • Updated full-year 2017 guidance

"We delivered strong bookings and solid operating performance in the third quarter," said Thomas A. Kennedy, Raytheon Chairman and CEO. "Global customer demand drove an increase in our backlog, which positions us well for continued growth in 2018."

Operating cash flow from continuing operations for the third quarter 2017 was $382 million compared to $640 million for the third quarter 2016. As expected, the change in operating cash flow from continuing operations was primarily due to higher required pension contributions in the third quarter 2017, partially offset by the timing of collections.

In the third quarter 2017, the company repurchased 1.1 million shares of common stock for $200 million. Year-to-date 2017, the company repurchased 4.4 million shares of common stock for $700 million.

Bookings in the third quarter 2017 were $7.0 billion, slightly higher than the third quarter 2016. Backlog at the end of the third quarter 2017 was $36.7 billion, an increase of approximately $950 million compared to the third quarter 2016.

Integrated Defense Systems (IDS) had third quarter 2017 net sales of $1,391 million, up 4 percent compared to $1,334 million in the third quarter 2016. The increase in net sales for the quarter was primarily driven by higher net sales on an international early warning radar program awarded in the first quarter 2017.

IDS recorded $231 million of operating income in the third quarter 2017 compared to $211 million in the third quarter 2016. The increase in operating income for the quarter was primarily driven by higher net program efficiencies and higher volume.

Intelligence, Information and Services (IIS) had third quarter 2017 net sales of $1,543 million compared to $1,534 million in the third quarter 2016.

IIS recorded $112 million of operating income in the third quarter 2017 compared to $123 million in the third quarter 2016.  The change in operating margin was primarily due to a change in program mix and other performance.

During the quarter, IIS booked $469 million on domestic and foreign training programs in support of Warfighter FOCUS activities and $104 million to provide intelligence, surveillance and reconnaissance (ISR) support to the U.S. Air Force. IIS also booked $686 million on a number of classified contracts.

Missile Systems (MS) had third quarter 2017 net sales of $1,945 million, up 10 percent compared to $1,770 million in the third quarter 2016. The increase in net sales for the quarter was primarily driven by higher net sales on the Paveway and Excalibur programs.

MS recorded $280 million of operating income in the third quarter 2017 compared to $235 million in the third quarter 2016. The increase in operating income for the quarter was primarily driven by higher net program efficiencies and higher volume.

During the quarter, MS booked $492 million for the Redesigned Kill Vehicle (RKV) program; $348 million for Tube-launched, Optically-tracked, Wireless-guided (TOW®) missiles; $206 million for Paveway; $145 million for Tomahawk; $136 million for Excalibur; $102 million for Standard Missile-3 (SM-3®); $91 million for Javelin; and $79 million for Horizontal Technology Integration (HTI) forward-looking infrared kits. MS also booked $427 million on a number of classified contracts.

Space and Airborne Systems (SAS) had third quarter 2017 net sales of $1,597 million compared to $1,590 million in the third quarter 2016.

SAS recorded $212 million of operating income in the third quarter 2017 compared to $215 million in the third quarter 2016.

During the quarter, SAS booked approximately $200 million on classified and unclassified space programs and $84 million for radar components for the U.S. Navy and the Royal Australian Air Force. SAS also booked $435 million on a number of other classified contracts.

Forcepoint had third quarter 2017 net sales of $170 million compared to $167 million in the third quarter 2016.

Forcepoint recorded $23 million of operating income in the third quarter 2017 compared to $41 million in the third quarter 2016. The decrease in operating income for the quarter was primarily driven by investments in sales and marketing.

About Raytheon

Raytheon Company, with 2016 sales of $24 billion and 63,000 employees, is a technology and innovation leader specializing in defense, civil government and cybersecurity solutions. With a history of innovation spanning 95 years, Raytheon provides state-of-the-art electronics, mission systems integration, C5I products and services, sensing, effects, and mission support for customers in more than 80 countries.

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