April 26 (Bloomberg) -- Raytheon Co., the world’s largest missile maker, raised its full-year profit forecast after first-quarter net income increased 17 percent.
Profit from continuing operations will 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.
Net income from continuing operations increased to $448 million, or $1.33 a share, compared with $384 million, or $1.06 a share, a year earlier, Raytheon, based in Waltham, Massachussetts said. Excluding certain items, profit was $1.46 a share, exceeding the $1.16-a-share average estimate of 19 analysts surveyed by Bloomberg. Sales declined 1.9 percent to $5.94 billion.
Raytheon rose 1.9 percent to $53.93 at the close in New York trading and has gained 11 percent this year.
Bill Swanson, the company’s chairman and chief executive officer, is focusing on cost-cutting and international sales in the face of projected declines in U.S. defense spending.
Raytheon is well-prepared to deal with consequences of automatic defense budget cuts of as much as $500 billion over the next decade that may take effect starting in January, Chief Financial Officer Dave Wajsgras said in a phone interview.
“We have implemented global IT systems on how we operate factories, how we design and engineer products and how we operate the supplier base that gives us tremendous flexibility that other large defense companies don’t have,” Wajsgras said.
The company has been planning for the consequences of a so-called sequestration in which U.S. defense budgets would be reduced beyond the $490 billion in cuts the Pentagon already has projected, Wajsgras said. “We are prepared to operate in any type of environment.”
The quarter’s results were aided by improved performance at its missile and integrated-systems units as well as international orders.
About 27 percent of the bookings during the quarter and 40 percent of the backlog is from non-U.S. customers, Wajsgras said. At the end of the first quarter Raytheon had a funded backlog of $23 billion in orders.
Operating income at the company’s Integrated Defense Systems and Missile Systems units rose 12 percent and 16 percent respectively during the quarter compared with a year earlier.
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