Raytheon Co. share price down, profit beats analysts projection as orders keep coming

Raytheon Co. raised its yearly target and released forecast-beating results during the recent quarter after successfully trimming costs to maintain profitability.

The worlds largest missile maker reported net profit of $519 million in the third quarter, compared to $493 million a year earlier. Earnings per share rose to $1.66 compared to $1.52 year-to-year and analysts average estimate of $1.60. Adjusted per-share earnings fell $0.03 to $1.57.

Third-quarter net sales dropped to $5.47 billion from $5.84 billion last year, including decreases in all four of its divisions.

Income from continuing operations in the third quarter rose 5.7% to $515 million, compared to the $487 million last year. The company widened its operating margin to 13.9% from 13% as it trimmed operating expenses by 7.4%.

“Raytheons solid third quarter operating results reflect strong program execution and our continued focus on operational efficiency,” said Thomas A. Kennedy, Chairman and CEO. “Bookings strength across our broad portfolio of proven technology solutions positions the company well for the future.”

The company reported bookings of $5.9 billion in the third quarter, an increase from the $5.7 billion last year.

Raytheon increased it forecast for 2014, including lifting its expectation for net sales to be between $22.7 billion and $23 billion from the previous $22.5 billion to $23 billion. Earnings per share are now expected to land between $6.77 – $6.87, a $0.02 increase on both ends.

The Pentagon recently authorized Raytheon to resume assembling warheads designed to intercept incoming intercontinental ballistic missiles from countries such as North Korea and Iran.

Raytheon was selected by the U.S. Air Force to develop a next-generation long-range radar system, a project with a value of $1.6 billion, according to a Bloomberg Intelligence analysis. The announcement was made earlier this month and prompted Lockheed Martin Corp. and Northrop Grumman Corp. to challenge this decision with the U.S. Government Accountability Office.

Raytheon Co. slipped 0.67% on Wednesday and closed at $97.45 in New York, marking a one-year increase of 27.87%. The company is valued at $30.28 billion. According to the Financial Times, the 19 analysts offering 12-month price targets for Raytheon Co. have a median target of $110.00, with a high estimate of $121.00 and a low estimate of $88.00. The median estimate represents a 12.88% increase from the last price of $97.45.