Raytheon Reports Solid First Quarter 2012 Results
- Adjusted EPS of $1.46, up 7 percent; EPS from continuing operations was $1.33(1)
WALTHAM, Mass., April 26, 2012 /PRNewswire/ -- Raytheon Company (NYSE: RTN) announced first quarter 2012 Adjusted EPS of $1.46 per diluted share compared to $1.37 per diluted share in the first quarter 2011(1), up 7 percent. The increase was driven by capital deployment actions and operational improvements. First quarter 2012 EPS from continuing operations was $1.33 compared to $1.06 in the first quarter 2011. First quarter 2012 included an unfavorable FAS/CAS Adjustment of $0.14, compared with an unfavorable FAS/CAS Adjustment of $0.16 in the first quarter 2011. First quarter 2011 EPS from continuing operations also included a $0.16 unfavorable impact associated with the UKBA Letters of Credit (LOC) Adjustment(2).
"Our focus on performance drove solid operating results in the first quarter," said William H. Swanson, Raytheon's Chairman and CEO. "These results reflect our ongoing commitment to providing best value in meeting our customers' evolving requirements for affordable, innovative solutions."
Net sales for the first quarter 2012 were $5,938 million, compared to $6,052 million in the first quarter 2011.
Operating cash flow from continuing operations for the first quarter 2012 was $111 million compared to $60 million for the first quarter 2011.
In the first quarter 2012, the Company repurchased 7.9 million shares of common stock for $400 million as part of its previously announced share repurchase program. In addition, as announced in March 2012, the Company's Board of Directors voted to increase the Company's annual dividend rate by 16 percent from $1.72 to $2.00 per share, the eighth consecutive annual dividend increase.
The Company ended the first quarter 2012 with $1.1 billion of net debt. Net debt is defined as total debt less cash and cash equivalents.
Bookings and Backlog
The Company ended the first quarter 2012 with a backlog of $34.3 billion, compared to $33.7 billion at the end of the first quarter 2011.
The Company has updated its full-year 2012 outlook. Charts containing additional information on the Company's 2012 outlook are available on the Company's website at www.raytheon.com/ir.
The Company's reportable segments are: Integrated Defense Systems, Intelligence and Information Systems, Missile Systems, Network Centric Systems, Space and Airborne Systems, and Technical Services.
Integrated Defense Systems (IDS) had first quarter 2012 net sales of $1,220 million compared to $1,219 million in the first quarter 2011. IDS recorded $216 million of operating income compared to $193 million in the first quarter 2011. The change in operating income was primarily due to favorable contract mix and improved program performance.
During the quarter, IDS booked $182 million to provide Patriot engineering services support for U.S. and international customers. IDS also booked $90 million to provide engineering services, production and support for the Aegis weapon system for the U.S. Navy.
Intelligence and Information Systems (IIS) had first quarter 2012 net sales of $764 million compared to $750 million in the first quarter 2011. The change in net sales was primarily due to recent acquisitions in cybersecurity. IIS recorded $62 million of operating income compared to a $28 million loss in the first quarter 2011. The change in operating income was primarily due to the $80 million UKBA LOC Adjustment in the first quarter 2011. First quarter 2012 operating income included an insurance recovery for legal expenses.
During the quarter, IIS booked $284 million on a number of classified contracts.
Missile Systems (MS) had first quarter 2012 net sales of $1,351 million compared to $1,329 million in the first quarter 2011. The increase in net sales was primarily due to higher sales on Excalibur. MS recorded $180 million of operating income compared to $155 million in the first quarter 2011. The increase in operating income was primarily due to favorable contract mix and improved program performance.
During the quarter, MS booked $497 million for a Advanced Medium-Range Air-to-Air Missiles (AMRAAM) contract for the U.S. Air Force and international customers and $172 million for AIM-9X Sidewinder short range air-to-air missiles for the U.S. Navy and international customers. MS also booked $171 million for the development of Standard Missile-3 (SM-3) for the Missile Defense Agency (MDA) and $79 million for development on the Accelerated Improved Intercept Initiative (AI3) program for the U.S. Army.
Network Centric Systems (NCS) had first quarter 2012 net sales of $1,000 million compared to $1,121 million in the first quarter 2011. The change in net sales, as anticipated, was primarily due to lower sales on U.S. Army programs. NCS recorded $116 million of operating income compared to $160 million in the first quarter 2011. The change in operating income was primarily due to lower volume in the first quarter 2012 as well as production program efficiencies in the first quarter 2011.
During the quarter, NCS booked $81 million on the Navy Multiband Terminal (NMT) program for the U.S. Navy.
Space and Airborne Systems (SAS) had first quarter 2012 net sales of $1,257 million compared to $1,265 million in the first quarter 2011. SAS recorded $173 million of operating income compared to $156 million in the first quarter 2011. The increase in operating income was primarily due to improved program performance.
During the quarter, SAS booked $159 million to supply radar spare parts on APG-63 for an international customer, $99 million on a radar performance-based logistics (PBL) contract for international customers and $77 million for the production of radar warning receivers for the U.S. Navy. SAS also booked $925 million on a number of classified contracts.
Technical Services (TS) had first quarter 2012 net sales of $802 million compared to $799 million in the first quarter 2011. TS recorded operating income of $71 million compared to $81 million in the first quarter 2011. First quarter 2011 operating income included a favorable contract modification, contract extension, and a legal settlement.
During the quarter, TS booked $119 million on foreign training programs and $68 million on domestic training programs in support of Warfighter FOCUS activities.
Conference Call on the First Quarter 2012 Financial Results
The dial-in number for the conference call will be (866) 510-0712 in the U.S. or (617) 597-5380 outside of the U.S. The conference call will also be audiocast on the Internet at www.raytheon.com/ir. Individuals may listen to the call and download charts that will be used during the call. These charts will be available for printing prior to the call.
Interested parties are encouraged to check the website ahead of time to ensure their computers are configured for the audio stream. Instructions for obtaining the free required downloadable software are posted on the site.
Disclosure Regarding Forward-looking Statements
Investor Relations Contact
(1) Adjusted EPS is EPS from continuing operations attributable to Raytheon Company common stockholders and Adjusted Operating Margin is total operating margin, in each case, excluding the impact of the FAS/CAS Adjustment, and from time to time, certain other items. Adjusted EPS and Adjusted Operating Margin are non-GAAP financial measures. See attachment F for a reconciliation of these measures and a discussion of why the Company is presenting this information.
(2) See attachment F for a discussion of the previously disclosed UKBA LOC Adjustment.
SOURCE Raytheon Company
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