Post Earnings Coverage as Raytheon's Sales Increased 3.4%; EPS Surged 21%
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LONDON, UK / ACCESSWIRE / May 8, 2017 / Active Wall St. announces its post-earnings coverage on Raytheon Co. (NYSE: RTN). The Company released its first quarter fiscal 2017 results on April 27, 2017. The aerospace and defense Company surpassed top- and bottom-line expectations. Register with us now for your free membership at:
One of Raytheon's competitors within the Aerospace/Defense Products & Services space, Esterline Technologies, Corp. (NYSE: ESL), announced its financial results for Q2 FY17 on Thursday, May 04, 2017. AWS will be initiating a research report on Esterline Technologies in the coming days.
Today, AWS is promoting its earnings coverage on RTN; touching on ESL. Get our free coverage by signing up to:
For the three months ended April 2, 2017, Raytheon announced net sales of $6.0 billion, up 3.4%, compared to $5.8 billion in Q1 2016. The Company's revenue numbers surpassed analysts' consensus of $5.84 billion.
For Q1 2017, Raytheon reported earnings of $503 million compared to earnings of $427 million. On a per-share basis, the Waltham, Massachusetts-based Company said it had profit of $1.74, up 21%, compared to earnings of $1.43 in Q1 2016. Earnings, adjusted to account for discontinued operations, were $1.73 per share. The results beat Wall Street's expectations of $1.61 per share
Segment Results
For Q1 2017, Raytheon's Integrated Defense Systems (IDS) segment's net sales were $1.40 billion, up 5% compared to $1.34 billion in Q1 2016. The increase in net sales for the reported quarter was primarily driven by higher net sales on an international early warning radar program awarded. IDS recorded $212 million of operating income in Q1 2017 compared to $146 million in Q1 2016. The increase in operating income for the quarter was primarily driven by higher net program efficiencies and a favorable change in program mix. During the reported quarter, IDS booked $987 million for the Upgraded Early Warning Radar (UEWR) system for Qatar. IDS also booked $220 million to provide Patriot™ engineering services support for US and international customers.
Raytheon's Intelligence, Information and Services (IIS) segment reported net sales of $1.51 billion compared to $1.53 billion in Q1 2016. The change in net sales for the reported quarter was primarily driven by lower net sales on an international classified program. IIS recorded $111 million of operating income in the reported quarter compared to $104 million in the year earlier same quarter. During Q1 2017, IIS booked approximately $930 million on US Air Force programs. IIS also booked $390 million on a number of classified contracts.
During Q1 2017, Raytheon's Missile Systems (MS) net sales increased to $1.76 billion compared to $1.72 billion in Q1 2016. MS recorded $216 million of operating income in the reported quarter compared to $192 million in the year earlier comparable quarter. During the reported quarter, MS booked $203 million for AIM-9X Sidewinder™ short-range air-to-air missiles for the US and international customers and $159 million for Paveway™ for international customers.
For Q1 2017, Space and Airborne Systems (SAS) segment generated net sales of $1.56 billion, up 8% compared to $1.45 billion in Q1 2016, primarily driven by higher net sales on an electronic warfare systems program. The SAS segment recorded $190 million of operating income in the reported quarter compared to $167 million in the prior year's corresponding quarter. The increase in operating income was attributed to a favorable change in program mix and higher volume.
During Q1 2017, SAS booked $256 million for Active Electronically Scanned Array (AESA) radars for the US Air Force, and $250 million on two contracts for international customers, one for military processors and one for radar warning receivers. SAS also booked $402 million on a number of classified contracts.
Raytheon's Forcepoint had net sales of $144 million in Q1 2017, up 4% compared to $139 million in Q1 2016. Forcepoint recorded $16 million of operating income in the reported quarter compared to $18 million in the prior year's same quarter.
Cash Balance
Raytheon's operating cash flow from continuing operations for Q1 2017 was an outflow of $41 million compared to an inflow of $325 million for Q1 2016. The Company's bookings in the reported quarter were $5.7 billion compared to $6.2 billion in the year earlier comparable quarter.
Raytheon's Backlog at the end of Q1 2017 was $36.1 billion, an increase of approximately $1.9 billion, or 5.5%, compared to Q1 2016.
In Q1 2017, Raytheon repurchased 2.7 million shares of common stock for $400 million. The Company's Board of Directors voted to increase the annual dividend rate by 8.9% from $2.93 to $3.19 per share, the thirteenth consecutive annual dividend increase.
Stock Performance
At the close of trading session on Friday, May 05, 2017, Raytheon's share price finished the trading session at $159.41, slightly up by 0.97%. A total volume of 1.43 million shares exchanged hands. The stock has surged 19.07% and 26.99% in the last six months and past twelve months, respectively. Furthermore, since the start of the year, shares of the Company have gained 12.85%. The stock is trading at a PE ratio of 20.57 and has a dividend yield of 2.00%.
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