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Raytheon’s profit rises, boosted by jet sales

Defense contractor Raytheon Co. on Thursday said third-quarter profit rose a better-than-expected 50 percent, helped by strong sales of its jets and intelligence systems.
/ Source: Reuters

Defense contractor Raytheon Co. on Thursday said third-quarter profit rose a better-than-expected 50 percent, helped by strong sales of its jets and intelligence systems.

Raytheon, which makes Stinger and Tomahawk missiles, Hawker jets and a range of technology systems, also nudged up its full-year profit forecast.

The Waltham, Massachusetts-based company reported net profit of $228 million, or 50 cents per share, compared with $152 million, or 34 cents per share, a year earlier.

Excluding some one-time items, it reported earnings from continuing operations of 51 cents per share. That beat Wall Street’s forecast of 48 cents as compiled by Reuters Estimates.

Sales rose 8 percent to $5.3 billion, a little below analysts’ average forecast of $5.48 billion.

Raytheon, like rivals Lockheed Martin Corp., Northrop Grumman Corp. and General Dynamics Corp. , is thriving on high levels of U.S. defense spending over the past few years. But concerns over the Pentagon’s planned budget cuts are starting to weigh on the sector.

Raytheon raised its full-year profit estimate, forecasting earnings from continuing operations of $2 to $2.05 per share, up from its July forecast of $1.90 to $2. Wall Street is expecting, on average, $2.01.

For 2006, Raytheon forecast earnings of $2.40 to $2.50 per share. Analysts are expecting $2.44.

Raytheon shares are down about 5 percent so far this year, compared with a 7 percent rise in the Standard & Poor’s Aerospace and Defense index. Raytheon shares are trading at about 15 times estimated 2006 earnings, in line with its competitors.