April 26, 2018 / 10:57 AM / in a year

Raytheon quarterly profit rises about 26 pct on lower taxes

April 26 (Reuters) - Tomahawk missile maker Raytheon Co reported a 25.6 percent increase in first-quarter profit on Thursday, benefiting from lower taxes.

The tax cut windfall is boosting profits at Raytheon, whose operations are also being aided by an increase in overall defense spending under President Donald Trump’s administration.

Last week, the administration rolled out here a long-awaited overhaul of U.S. arms export policy aimed at expanding sales to allies, benefiting Raytheon and other U.S. weapons makers.

Raytheon on Thursday raised its 2018 forecast for earnings per share from continuing operations to between $9.70 and $9.90 from between $9.55 and $9.75, previously, partly due to a lower-than-anticipated effective tax rate.

The weapons maker said its 2018 net sales would now be in a range of $26.5 billion to $27.0 billion, up from its previous forecast of $26.4 billion to $26.9 billion.

Analysts on average were expecting full year profit of $9.71 per share, and sales of $26.74 billion, according to Thomson Reuters I/B/E/S.

Raytheon, however, kept its 2018 outlook for operating cash flow from continuing operations unchanged between $3.6 billion and $4.0 billion.

Sales at Raytheon’s missile systems unit, its biggest by revenue, rose 5.2 percent to about $1.85 billion in the quarter ended April 1, driven by higher sales from classified programs.

The company said operating margin in the unit fell to 11.5 percent from 12.3 percent a year earlier, due to a change in program mix.

Sales in Raytheon’s intelligence, information and services business, its second-biggest in the quarter, rose about 5 percent to $1.58 billion. Operating margin was flat at 7.4 percent.

The company’s income from continuing operations rose to $624 million in the first quarter, from $497 million a year earlier.

Income from continuing operations attributable to Raytheon common stockholders was $2.20 per share, compared with $1.73 per share, a year earlier.

Net sales rose 4.5 percent to $6.27 billion. (Reporting by Mike Stone in Washington and Ankit Ajmera in Bengaluru; Editing by Shounak Dasgupta)

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