July 28, 2020 / 11:30 AM / 12 days ago

Raytheon's defense business drives quarterly profit beat

(Reuters) - Raytheon Technologies Corp RTX.N on Tuesday topped analysts’ estimates for quarterly profit and sales, boosted by strength in its defense business, which makes parts for Lockheed Martin’s (LMT.N) F-35 fighter jets.

FILE PHOTO: A Raytheon building is shown in San Diego, California, U.S., June 10, 2019. REUTERS/Mike Blake

Shares of the company rose 2.3% to $62.50 in premarket trading.

Raytheon said it achieved a record backlog of $73.1 billion from its defense business in the second quarter, pointing to strong demand from the U.S. government and international customers.

“This also points to how well our (defense) programs are funded and their alignment to the national defense strategy,” Raytheon Chief Financial Officer Toby O’Brien told Reuters.

Raytheon gets about 30% of its defense sales from international customers.

The company said it continues to see full-year free cash flow of $2 billion, with its commercial aerospace business to be around break-even and defense business generating about $3.5 billion in cash by the end of the year.

The pandemic has extracted a heavy toll on the air industry, with Raytheon having warned last month it expects total commercial aero sales to be down about 50% between the second and fourth quarter.

Net loss attributable to common shareowners was $3.84 billion, or $2.55 per share, for the quarter ended June 30, compared with a profit of $1.90 billion, or $2.22 per share, a year earlier.

Revenue rose 24% to $14.06 billion, above estimates of $13.48 billion, according to Refinitiv data.

Excluding items, Raytheon earned 40 cents per share, above Street estimates of 12 cents per share.

Reporting by Sanjana Shivdas and Ankit Ajmera in Bengaluru; Editing by Ramakrishnan M.

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