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Raytheon shares gain, buck Street's downdraft

Raytheon shares gain, buck Street's downdraft

By Shawn Langlois, MarketWatch
Last Update: 4:11 PM ET Jul 26, 2007

SAN FRANCISCO (MarketWatch) -- Raytheon Co. reported Thursday a second-quarter profit that more than tripled, mostly reflecting the sale of the defense contractor's aircraft unit.
Shares of Raytheon (RTN) shed 25 cents to finish at $54.90 after bucking broader market weakness throughout much of the trading day.

The Waltham, Mass.-based company posted a net profit of $1.33 billion, or $2.97 per share, up from $310 million, or 69 cents per share, in the same quarter a year ago.
Net sales totaled $5.42 billion, compared with $4.97 billion in the year-earlier second quarter.

The sale of Raytheon Aircraft Co. during the second quarter amounted to a gain of $986 million. On a continuing operations basis, the company posted a profit of 79 cents a share, up from 61 cents, thanks to operational improvements, lower net interest and fewer pension expenses.

Analysts polled by Thomson Financial had expected earnings of 68 cents a share.

Raytheon also raised its outlook for earnings from continuing operations in 2007 to a range of $3.05 to $3.20 a share, up from a previous estimate of $2.85 to $3 a share.
Rival Boeing Co. (BA) , which on Wednesday that it swung to a second-quarter profit, bumped up its earnings forecast as well, and raised spending levels. See full story.
Lockheed Martin Corp. (LMT) Northrop Grumman Corp. (NOC) and General Dynamics Corp. (GD) have also lifted their projections for the full year.

Bank of America analyst Robert Stallard applauded Raytheon's results but stopped short of telling clients it's time to buy any of the major defense contractors.

"We remain neutral on defense as a sector ... given the likely slowdown in defense spending as the U.S. withdraws from Iraq and uncertainty concerning the presidential elections next year," he said in a note. End of Story

Shawn Langlois is a reporter for MarketWatch, and the editor of its community message boards.