July 25, 2019 / 10:59 AM / 5 months ago

Raytheon profit beats, raises full-year outlook

July 25 (Reuters) - U.S. weapons maker Raytheon Co on Thursday reported a better-than-expected second-quarter profit and raised its full-year profit and sales outlook, helped by higher sales of missiles and guns for naval ships.

Massachusetts-based Raytheon and other U.S. weapons makers are expected to benefit from the recently passed $733-billion defense bill for fiscal year 2020, representing an about 2% higher spending over the previous year.

Geopolitical tensions surrounding the safe shipping of oil tankers through the Strait of Hormuz could also aid weapons sales for U.S. contractors this year.

Sales in Raytheon's missile systems unit, which makes radar threat countering high-speed anti-radiation missiles and rapid-fire, radar-guided guns for ships, rose 8% to $2.21 billion in the quarter ended June 30.

Margins in the business increased to 11.4% from 11.3%.

Last month, Raytheon agreed to merge with United Technologies aerospace business to create a new company worth about $121 billion.

Raytheon said on Thursday, the merger was progressing well and was on track to close in the first half of 2020.

Revenue in Raytheon's space and airborne systems business, its second biggest, jumped 13.2% to $1.82 billion, helped by higher sales of its products including missile warning satellites and tactical radars to international customers.

Margins in the unit fell to 12.6% from 12.8%.

The company now expects its 2019 net sales between $28.8 billion and $29.3 billion, up from a range of $28.6 billion to $29.1 billion, previously.

The company also raised its full-year forecast for earnings per share from continuing operations to a range of $11.50 to $11.70, from $11.40 to $11.60.

Raytheon's income from continuing operations rose to $817 million, or $2.92 per share in the quarter, from $799 million, or $2.78 per share, a year earlier.

Revenue in the quarter rose 8.1% to $7.16 billion.

Analysts on average had expected quarterly earnings of $2.64 per share on a revenue of $7.04 billion, according to IBES data from Refinitiv. (Reporting by Dominic Roshan K.L. and Ankit Ajmera in Bengaluru; Editing by Shailesh Kuber)

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