Tomahawk Missile Maker Raytheon's Sales Rise 3.4%

Raytheon Co (NYSE:RTN) reported a 3.4 percent rise in quarterly revenue, helped by higher sales in its divisions that make Tomahawk cruise missiles and electronic warfare systems.

The company that makes Patriot missile system also raised its 2017 forecast for sales by about $100 million to $24.9 billion-$25.4 billion, and earnings from continuing operations by 5 cents to $7.25-$7.40.

Analysts on average were expecting sales of $25.09 billion, and earnings of $7.40 per share, according to Thomson Reuters I/B/E/S.

Raytheon said it expects its 2017 net interest expense to be lower by $20 million to $196 million-$201 million, and effective tax rate to be down by 0.5 percent to 31 percent.

Revenue in Raytheon's space and airborne systems business, its second-biggest unit by sales, rose 7.6 percent to $1.56 billion in the first-quarter ended April 2, helped by higher sales of an electronic warfare systems program.

Operating margins in the unit increased to 12.2 percent, from 11.6 percent. The business accounted for about 26 percent of Raytheon's quarterly revenue.

The space and airborne systems unit makes electronic warfare systems for tactical aircraft, helicopters and ships, as well as tracking and navigation sensors used on airborne platforms, among other products.

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Sales in the company's missile systems unit, which also makes Paveway smart bombs and advanced medium-range air-to-air missiles, rose 1.9 percent to $1.76 billion.

Operating margins in the business rose to 12.3 percent, from 11.1 percent. The missile systems unit, which is Raytheon's biggest business, accounted for 29.3 percent of its quarterly revenue.

The company's total sales rose to $6.00 billion from $5.80 billion a year earlier.

Income from continuing operations attributable to Raytheon shareholders rose to $1.73 per share, from $1.43 per share, a year earlier.

Analysts on average had expected first-quarter sales of $5.83 billion, and earnings of $1.61 per share.

Bookings fell 8.3 percent to $5.69 billion in the first quarter, compared with a year earlier. Bookings is a forward-looking metric that measures the value of firm orders won by Raytheon.

The Waltham, Massachusetts-based company repurchased 2.7 million shares of its common stock for $400 million in the quarter, and increased its annual dividend rate by 8.9 percent to $3.19 per share.