Missile maker Raytheon's sales fall 1.4 percent, shares drop
27 January 2017
Raytheon Co (RTN.N) reported a 1.4 percent fall in quarterly revenue, hurt by slower sales in its units that make missile systems and the tracking and navigation sensors used in aircraft and missiles.
The maker of Patriot missiles forecast 2017 sales of $24.8 billion-$25.3 billion, below analysts' average estimate of $25.55 billion, according to Thomson Reuters I/B/E/S.Shares of the Waltham, Mass.-based company were down 3 percent to $142.50 following the results announcement.
The company said sales in its missile systems unit, which makes Paveway smart bombs and medium-range air-to-air missiles, rose 1 percent to $1.90 billion in the fourth quarter ended Dec. 31, the slowest rise in six quarters.
The missile systems unit, which is Raytheon's biggest business, accounted for 29.4 percent of its 2016 revenue.During a call with analysts, Chief Executive Tom Kennedy said the Trump administration's pursuit of ISIS could boost future precision missile sales.
Sales in Raytheon's space and airborne systems business, its second-biggest unit by revenue, recorded the slowest growth in four quarters, with a 2 percent rise. The unit contributed 25.6 percent to its full-year sales.The company's total sales fell to $6.24 billion from $6.33 billion a year earlier.
Raytheon said there were four fewer work days in the fourth quarter, compared with the same period a year earlier, reducing its sales by about $100 million per day.
Income from continuing operations attributable to Raytheon shareholders fell 2.5 percent to $544 million, or $1.84 per share, in the fourth quarter from $558 million, or $1.85 per share, a year earlier.
Raytheon said its tax-related earnings were reduced by 4 cents per share as it made a $500 million pretax discretionary pension plan contribution in the quarter.
The company, which adopted a new revenue recognition standard from Jan. 1, said it expected earnings from continuing operations of $7.20-$7.35 per share for 2017.
Raytheon said the impact of adopting the new accounting standard on the company's 2015 and 2016 net sales and operating income was not material.
Bookings fell 3.6 percent to $7.58 billion in the fourth quarter, but were up 10.3 percent to a record $27.84 billion for the full year. Bookings is a forward-looking metric that measures the value of firm orders won by Raytheon.
Raytheon's shares had risen 23.9 percent in the past 12 months up to Wednesday's close of $146.87, compared with a 29.7 percent increase in the Dow Jones U.S. Aerospace & Defense index .DJUSAE.