Raytheon’s Overseas Focus Lifts Weapons Maker to Sales GainBy
Long-anticipated contract with Qatar boosts quarterly revenue
Maker of Patriot missile-defense systems raises forecasts
As U.S. weapons makers await a possible surge in defense spending under President Donald Trump, Raytheon Co. is getting a boost from overseas.
The nation’s fourth-largest defense contractor booked a long-anticipated agreement with Qatar during the first quarter valued at about $1 billion, lifting net sales to a 3.4 percent gain. The company also inked a pair of international deals valued at a combined $250 million for its Space and Airborne Systems division.
“We continue to see demand pretty much across all regions of the world,” Chief Financial Officer Toby O’Brien said in a telephone interview Thursday after reporting quarterly results that topped analysts’ estimates. The “threat environment” in areas such as the Middle East and around North Korea has led countries to seek to bulk up defense capabilities, he said.
Raytheon, known for products such as Patriot missile-defense systems, has turned to international markets and newer business lines including cybersecurity in recent years to supplement domestic operations. The Waltham, Massachusetts-based company raised its full-year forecasts even before government contractors learn whether they will benefit from greater U.S. defense spending under Trump.
The generally low-profile company was thrust into the spotlight recently after the U.S. ordered a strike on Syria that launched 59 of Raytheon’s Tomahawk missiles at a government airbase.
Raytheon rose as much 1.7 percent in early trading in New York. The shares had gained 9.3 percent this year through Wednesday, outpacing the 6.6 percent gain in the Standard & Poor’s 500 Index.
First-quarter earnings from continuing operations rose to $1.73 a share, Raytheon said in a statement Thursday, topping the $1.60 average of analysts’ estimates compiled by Bloomberg. Net sales of $6 billion beat the $5.83 billion anticipated by analysts.
International sales grew by 7.5 percent in the quarter, O’Brien said. The outlook remains bright as the company sees a number of foreign sales opportunities, including as many as five countries that are currently interested in Patriot orders, he said.
Revenue was buoyed by a 5 percent gain in the Integrated Defense Systems division, which the company credited largely to the Qatar contract for an upgraded early warning radar system. The deal had been discussed for more than a year as the company sought government approval.
Total earnings from continuing operations in 2017 will be $7.25 to $7.40 a share, an increase of 5 cents from the prior forecast, Raytheon said. It also increased the sales outlook to $24.9 billion to $25.4 billion, $100 million more than previous guidance.
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