- Defense contractor's profit beats analysts' estimates
- Maker of Patriot missile has been winning contracts abroad
Raytheon Co. boosted sales last year for the first time since 2010 and forecast a second consecutive gain as the maker of Patriot missile-defense systems focuses on growth abroad.
Revenue in 2016 will be $24 billion to $24.5 billion, the company said Thursday in a statement as it reported fourth-quarter earnings above analysts’ estimates. Even the low end of the forecast would mark an increase from the $23.2 billion total for last year.
“We continue to see strong demand internationally,” Chief Financial Officer Toby O’Brien said in a telephone interview. “In 2015, 31 percent of our total sales were international. That was a new record for the company.”
The nation’s fourth-largest defense contractor has set its sights on business outside the U.S. as the Pentagon has tightened spending in recent years. Raytheon also has been bulking up its cybersecurity business to generate more revenue from commercial customers.
Profit this year will climb to $6.80 to $7 a share from $6.75 in 2015, Raytheon said. The forecast fell short of analysts’ average estimate of $7.10. Competitor Northrop Grumman Corp., which also reported fourth-quarter earnings Thursday, forecast 2016 earnings of $9.90 to $10.20, below analysts’ estimates.
International sales for the Patriot system boosted Raytheon’s Integrated Defense Systems unit, which increased net revenue 5.2 percent in the fourth quarter. The company also said it booked $255 million for work on systems for the U.S. Navy’s Zumwalt-class destroyer program.
Earnings from continuing operations were $1.85 a share, one cent less than a year earlier, the Waltham, Massachusetts-based company said. The latest figure exceeded analysts’ average estimate of $1.82. Profit of $558 million fell 3.1 percent.
Net sales in the quarter rose 3 percent to $6.33 billion, above analysts’ average estimate of $6.29 billion. For the full year, revenue advanced 1.8 percent.
Raytheon, which agreed last year to invest $1.57 billion in a new cybersecurity firm that combined some of its operations with Websense Inc., will continue to consider acquisitions in 2016, O’Brien said.
“Right now, the way we think about M&A is for smaller, targeted acquisitions that would fill a technology gap,” he said. “We don’t anticipate any major, large acquisition.”
Raytheon shares rose 15 percent last year, compared with a 0.7 percent decline in the Standard & Poor’s 500 Index.