REUTERS: Tomahawk missile maker Raytheon Co reported an 8.5 percent rise in fourth-quarter revenue on Thursday, boosted by higher demand for its weapons from the United States and its allies.
Raytheon reported higher sales across its five segments, led by its missile systems unit, where sales rose 6 percent to about US$2.32 billion. The increase was driven by higher sales from 'classified programs', for which the company does not provide detailed numbers.
Waltham, Massachusetts-based Raytheon and other U.S. weapons makers are expected to benefit from strong global demand for fighter jets and munitions as well as higher U.S. defense spending in fiscal 2020.
Operating margin in the missile systems unit, which makes Paveway smart bombs and advanced medium-range air-to-air missiles, fell to 11.8 percent in the quarter ended Dec. 31 from 12.7 percent a year earlier, due to a change in mix.
The U.S. weapons maker forecast 2019 profit in the range of US$11.40 to US$11.60 per share, which came in below analysts' average estimate of US$11.78 per share, according to IBES data from Refinitiv.
Rivals Lockheed Martin Corp and General Dynamics Corp also forecast their 2019 profit below analysts' estimates this week.
Raytheon also said operating cash flow from continuing operations is expected to be in the range of US$3.9 billion to US$4.1 billion in 2019, compared with US$3.4 billion in the previous year. But the mid-point of the forecast fell short of analysts' average estimate of about US$4.1 billion.
The company expects 2019 net sales to range between US$28.6 billion and US$29.1 billion, marginally below analysts' average expectation of US$29.01 billion, according to Refinitiv data.
Revenue in the quarter rose to US$7.36 billion from US$6.78 billion a year earlier.
Raytheon's net income attributable to the company jumped to US$832 million, or US$2.93 per share, in the quarter, compared with US$393 million, or US$1.35 per share, a year earlier, benefiting from lower taxes related to the U.S. tax overhaul.
Sales at the space and airborne systems unit, which makes electronic warfare systems for tactical aircraft, helicopters and ships, rose 12.6 percent to US$1.88 billion, but operating margins fell to 13.9 percent from 14.5 percent.
(Reporting by Rama Venkat in Bengaluru and Mike Stone in Washington; Editing by James Emmanuel)