NEW YORK – Raytheon Co. raised its 2018 outlook as the defense contractor said international orders and work on classified programs helped it generate higher sales in the third quarter.
Earnings rose to $641 million, or $2.25 a share in the third quarter, compared with $572 million or $1.97 per diluted share one year prior. Sales increased to $6.8 billion from the previous year’s $6.3 billion as all divisions registered revenue gains.
Earnings from continuing operations will be $10.01 to $10.11 a share this year, up from a previous forecast of $9.77 to $9.97, the company said Thursday in a statement. That’s above the $9.96 average of analysts’ estimates. Sales will be $27 billion to $27.3 billion.
Key insights
The missile-maker booked $1.3 billion in the quarter on a sale of its Patriot defense system to Poland, and the company anticipates an order next year from Sweden, Chief Financial Officer Toby O’Brien said in a telephone interview. “Things continue to progress well from an international point of view.’’ O’Brien deferred questions on Saudi Arabia until a conference call at 9 a.m. New York time. Defense contractors have been in the spotlight after the killing of journalist Jamal Khashoggi upended relations with the desert kingdom and threatened international arms sales.
Market reaction
The shares rose 2.8 percent in New York before regular trading. Raytheon fell 3.1 percent this year through Wednesday, trailing the 2.1 percent gain in a Standard & Poor’s index of aerospace and defense companies. Raytheon will try to buck the trend among defense contractors, which have endured steep stock declines this week despite generally good results. Lockheed Martin Corp. and Northrop Grumman Corp. each fell on the day they reported earnings.
Next year is shaping up well for the Waltham, Massachusetts-based company. While Raytheon hasn’t given a full forecast for 2019, in a preliminary outlook on Thursday it said net sales will rise 6 to 8 percent.
Richard Clough is a reporter for Bloomberg News.
