Raytheon, L-3, Lockheed Shares Rise on Higher Defense Profit

L-3 Communications Holdings Inc. (LLL) rose the most in more than a year after the maker of military communications and electronics equipment boosted its full-year profit forecast.

Raytheon Co. (RTN), the world’s largest missile maker, and Lockheed Martin Corp. (LMT), the nation’s biggest defense contractor, also gained on higher defense profits. Shares of General Dynamics (GD) Corp. fell after it reported a drop in first-quarter profit yesterday.

Shares of L-3 climbed 5.1 percent to close today at $73.59 in New York trading, the biggest gain since Jan. 7, 2011. The shares earlier rose as much as 6.8 percent for the biggest gain since Nov. 21, 2008.

The defense contractor’s sales “exceeded our expectations” in all segments, with the largest gains in the company’s communications, intelligence, surveillance and reconnaissance business, Joseph Nadol, a JPMorgan equity analyst in New York, wrote in a note to clients.

“That might get a better reception from the market than other defense results this quarter,” Nadol wrote.

L-3, based in New York, raised its full-year earnings forecast to $8.45 to $8.60 a share, from $8.35 to $8.55 a share. The contractor’s shares had increased 5.9 percent this year before today.

Profit in the first quarter rose 9 percent to $2.01 a share from $1.85 a share in the year-earlier period, the company said in a press release.

The BGOV Aerospace Index of nine defense contractors rose 1 percent today and has gained 12 percent this year.

Night-Vision Goggles

“Key wins” in the quarter included contracts for a Navy hovercraft program, night-vision goggles and cabin assemblies for Boeing Co. (BA)’s CH-47 Chinook helicopter, L-3 said.

Shares of Raytheon, based in Waltham, Massachusetts, rose 1.9 percent to close at $53.93 in New York trading. They had increased as much as 3.2 percent during the day, the biggest gain since Nov. 30.

Profit from continuing operations is projected to be $5 to $5.15 a share for the year compared with an earlier forecast of $4.90 to $5.05, the company said today in a statement.

Bill Swanson, Raytheon’s chairman and chief executive officer, is focusing on cost-cutting and international sales because U.S. defense spending is expected to decline.

Lockheed shares rose less than 1 percent to $91.70 in New York trading after the contractor said its first-quarter profit rose 20 percent. They peaked at $92.24 during the day -- the highest level since Oct. 20, 2008.

The Bethesda, Maryland-based company reaffirmed its 2012 forecast made in January of profit of $7.70 to $7.90 a share.

Oshkosh

Shares of another defense contractor, Oshkosh Corp. (OSK), climbed 1.9 percent to $23.38 after the company reported second- quarter results that beat analysts’ expectations.

The military’s largest supplier of blast-resistant trucks said profit in the quarter fell 45 percent to $37.3 million, or 41 cents a share, from $67.9 million, or 74 cents a share, in the year-earlier period.

The Oshkosh, Wisconsin-based company said sales rose 19 percent to $2.08 billion for the quarter that ended March 31.

General Dynamics and Northrop Grumman Corp. (NOC), reported first-quarter earnings yesterday.

Shares of General Dynamics, which makes Abrams battle tanks and Gulfstream jets, fell less than 1 percent to $67.05, the lowest level since Dec. 30.

Profit at the Falls Church, Virginia-based company declined to $564 million, or $1.57 a share, in the quarter from $618 million, or $1.64 a share, a year earlier, the company said. Sales declined 2.8 percent, to $7.58 billion.

Shares of Northrop, also based in Falls Church, rose less than 1 percent to $63.44, the highest level since July 26.

The company’s net income from continuing operations was $506 million, or $1.96 a share, in the first quarter compared with $496 million, or $1.67 a share, in the year-earlier period. Sales declined 8 percent, to $6.2 billion.

To contact the reporter on this story: Nick Taborek in Washington at ntaborek@bloomberg.net

To contact the editor responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net

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