Reuters Business Channel | Reuters.com

Reuters Business Channel | Reuters.com

UPDATE 2-Raytheon profit rises on arms, jets; ups forecast



NEW YORK, April 27 (Reuters) - Raytheon Co. said on Thursday quarterly profit rose a greater-than-expected 73 percent as the No. 5 U.S. defense contractor increased sales of military equipment and business jets.

The company, which makes Tomahawk missiles, Hawker jets and a range of defense electronics, also raised its full-year profit forecast on the back of the strong results.

The Waltham, Massachusetts-based company, whose shares rose 1 percent in early trading, reported first-quarter net profit of $287 million, or 64 cents per share, compared with $166 million, or 36 cents per share, a year earlier.

Wall Street's average forecast was 53 cents per share, according to analysts polled by Reuters Estimates.

Revenue rose 4 percent to $5.2 billion, matching Wall Street forecasts.

Raytheon, the No. 5 Pentagon contractor behind Lockheed Martin Corp. , Boeing Co. , Northrop Grumman Corp. and General Dynamics Corp. , has been thriving on high levels of U.S. defense spending over the past few years and has benefited from a surge in demand for business jets.

It is the last of the major defense companies to report quarterly earnings. All except Northrop posted strong increases.

On the back of the strong quarter, Raytheon raised its 2006 profit forecast to a range of $2.55 to $2.65 per share, up from a previous forecast of $2.45 to $2.55. Wall Street is expecting $2.56, on average.

Raytheon kept its 2006 revenue forecast unchanged at $23.1 billion to $23.6 billion. Analysts expect $23.4 billion.

The company's integrated defense systems unit reported first-quarter sales up 6 percent to $963 million, while its intelligence and information systems unit posted a 13 percent rise in sales to $611 million.

The Raytheon Aircraft Co. unit, which makes Hawker business jets and Beechcraft turboprop planes, reported sales up 12 percent to $493 million.

The aircraft unit's first-quarter bookings were $500 million, up from $472 million in the year-ago quarter.

Raytheon ended the quarter with a backlog of contracts worth $34.7 billion, up from $32.8 billion a year earlier.

Its shares were up 45 cents to $45.63 on the New York Stock Exchange. The shares are up 9 percent over the past three months, lagging the 18 percent rise in the Standard & Poor's Aerospace and Defense index <.GSPAERO>. The shares have risen 50 percent since the U.S.-led invasion of Iraq in March 2003.

Raytheon shares now trade at about 15 times projected 2007 earnings, close to the average multiple of 16 for the companies in the S&P Aero index.