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Thursday, April 23, 2009

Defense Stocks News - Raytheon (NYSE:RTN) Reports Strong First Quarter Results; Increases Full-Year Guidance

Defense Stocks News - Raytheon (NYSE:RTN) Reports Strong First Quarter Results; Increases Full-Year Guidance

- Net sales of $5.9 billion, up 10 percent

- Operating income of $712 million, up 17 percent

- Earnings per share (EPS) from continuing operations of $1.11, up 21 percent

- Solid bookings of $5.2 billion; backlog of $37.9 billion

- Increased annual dividend by 11 percent to $1.24 per share, as previously announced

WALTHAM, Mass., April 23, 2009 -- Raytheon Company (NYSE: RTN ) reported first quarter 2009 income from continuing operations of $457 million or $1.11 per diluted share compared to $401 million or $0.92 per diluted share in the first quarter 2008.

"We delivered strong results across all of our businesses during the quarter," said William H. Swanson, Raytheon's Chairman and CEO. "Raytheon's strong domestic and international business and diverse portfolio of more than 8,000 programs position us well today and for the future."

Net sales for the first quarter 2009 were $5.9 billion, up 10 percent from $5.4 billion in the first quarter 2008, with growth across all of the Company's businesses.

Operating cash flow from continuing operations for the first quarter 2009 was $411 million compared to $67 million for the first quarter 2008. The increase in operating cash flow was primarily due to a $337 million tax refund received in the first quarter 2009.

In the first quarter 2009 the Company repurchased 6.8 million shares of common stock for $300 million, as part of the Company's previously announced share repurchase program. In addition, as announced in March 2009, the Company's Board of Directors voted to increase the Company's annual dividend payout rate by 11 percent from $1.12 to $1.24 per share.

The Company ended the first quarter 2009 with $87 million of net debt. Net debt is defined as total debt less cash and cash equivalents.



Summary Financial Results 1st Quarter % ($in millions, except per share data) 2009 2008 Change

Net sales $5,884 $5,354 10% Total operating expenses 5,172 4,745 Operating income 712 609 17% Non-operating expenses, net 33 16 Income from cont. ops. before taxes $679 $593 15% Income from continuing operations $457 $401 14% Income/(loss) from disc. ops., net NM of tax 3 (2) Net income(1) $460 $399 15% Less: noncontrolling interests(1) 8 1 Net income attributable to Raytheon Company(1) $452 $398 14% Diluted EPS from continuing operations(2) $1.11 $0.92 21% Diluted EPS(2) $1.12 $0.92 22%

Operating cash flow from cont. ops. $411 $67 FAS/CAS pension adjustment Inc./(Exp.) $11 $(33) Workdays in fiscal reporting calendar 61 63

(1) Raytheon Company adopted FAS No.160, Noncontrolling Interests in Consolidated Financial Statements, effective January 1, 2009. (2) Raytheon Company adopted FASB Staff Position EITF 03-6-1 for Participating Securities, effective January 1, 2009, which decreased Q1 2008 diluted EPS from continuing operations by $0.01. The impact on Q1 2008 diluted EPS was less than $0.01.

The Company adopted FAS No.160, Noncontrolling Interests in Consolidated Financial Statements, effective January 1, 2009. The Company's noncontrolling interests relate primarily to Thales-Raytheon Systems Co. LLC, which is included in the Network Centric Systems (NCS) segment. The impact to NCS in the first quarter 2009 is an increase of $8 million in operating income compared to an increase of $1 million in the first quarter 2008.

During the quarter, the Company changed the reporting of a U.K. manufacturing facility from Space and Airborne Systems to Missile Systems. Prior period segment results have been revised to reflect this reorganization.

Bookings and Backlog



Bookings 1st Quarter ($in millions) 2009 2008

Total Bookings $5,209 $6,516

Backlog Period Ended ($in millions) 03/29/09 12/31/08

Backlog $37,939 $38,884 Funded Backlog $23,022 $21,986

The Company reported total bookings for the first quarter 2009 of $5.2 billion compared to $6.5 billion in the first quarter 2008. The Company ended the first quarter 2009 with a backlog of $37.9 billion compared to $38.9 billion at the end of 2008 and $37.7 billion at the end of the first quarter 2008.

Outlook



2009 Financial Outlook Current Prior (1/29/09)

Net Sales ($B) 24.4 - 24.9* 24.3 - 24.8 FAS/CAS Pension Income ($M) 47 47 Interest Inc./(Exp.), net ($M) (105) - (115) (105) - (115) Diluted Shares (M) 398 - 401* 402 - 405 EPS from Continuing Operations $4.55 - $4.70* $4.45 - $4.60 Operating Cash Flow from Cont. Ops. ($B) 2.2 - 2.4 2.2 - 2.4 ROIC (%) 11.1 - 11.6* 11.0 - 11.5**

* Denotes change from prior guidance. ** Prior ROIC guidance now reflects a 10 bp increase due to the impact of FAS 160, Noncontrolling Interests in Consolidated Financial Statements, which the Company adopted January 1, 2009. The Company's noncontrolling interests relate primarily to Thales-Raytheon Systems Co. LLC at NCS.

The Company has increased full-year 2009 guidance for net sales, earnings per share from continuing operations and Return on Invested Capital (ROIC), and updated the outlook for diluted share count. Charts containing additional information on the Company's 2009 guidance are available on the Company's website at www.raytheon.com.
see full financials and news at www.raytheon.com







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