Raytheon Company News

Raytheon reported earnings of $427 million for the 3rd quarter of 2008.They also reported strong bookings of $5.8 billion resulting in a backlog of $37.0 billion. Net sales for the quarter were $5.9 billion, up 12 percent from $5.2 billion in the third quarter 2007. Earnings per share from continuing operations were $1.01 which is up 17 percent compared to third quarter 2007. Additionally the Board of Directors authorized the repurchase of an additionally $2.0 billion of the company's outstanding common stock.

Raytheon has developed an advanced ground control system for US Air Force to address mission capability needs for the Predator unmanned aircraft system. Their unsolicited bid will address significant decreases in required aircrew manpower, faster training and reduced errors attributed to human interface. It also enables more aircraft to be controlled by the same number of operators. The company says it can produce the system in less than 12 months and predicts that during the next 10 years it can save the Air Force more than $ 500 million.

Defense Department Honors Raytheon

A radar warning receiver that equips the US Navy F/A-18e/F has earned Raytheon and its Navy partner a Performance-based logistic award form the Office of the Secretary of Defense. The citation recognized the" superb efforts" of the team in a meeting the terms of a $150 million contract for the ALR-67(V) 3 receiver. The receiver offers sophisticated digital technology to detect and identify radar emitters. Initially deployed during Operation Iraqi Freedom the system has been chosen by several international Air Forces. This is the third consecutive year Raytheon has received a performance based logistic award.

Missile Systems Received A Perfect Score

The missile system business recently completed an Earned Value Management Systems compliance by the Defense Contract Management Agency

DCMA auditors found that Missile Systems passed all 32 guidelines. Misslile Systems is the first defense contractor of its size to achieve such success and is now a benchmark for the industry" said Dr. Taylor W. Lawrence, President of Raytheon Missile Systems. Milestones included an EV training and certification program, developed an integrated automated tool suite for all programs, deployed an internal surveillance approach to assess and improve schedules and licensed an automated scheduling tool to contractors.

The United States Army awarded Raytheon an $85.3 million contract to produce Tactical Excalibur Projectiles for the US Army, US Marine Corp and the Australian Defense Forces. Excalibur, a co-operative effort between Raytheon Missile Systems and BAE systems Bofors of Sweden, is an artillery projectiles that provide precision-strike capability at extended ranges for current and future 155mm Howitzers. Excalibur is the only precision projectile from the US Army, USMC, and the Canadian Howitzers. The objective Excalibur has a 25 mile range that demonstrated better than 33 feet accuracy.

The company unsuccessfully tried to persuade a Massachusetts state tax board that because most of the company's work is done for the Federal Government it should be exempt from paying state sales taxes on much of what it buys here. The company is already exempt from paying taxes on many items it purchased specifically for the Federal Government such as computer chips, and metal sheets used in making missiles, but Raytheon said it should also be free from paying state sale taxes on its general overhead expenses. The company estimated that more than 81percent of its work was for the Govt in 2001 and 2002, therefore it deserved a refund of 81 percent of the taxes it paid on overall expenses-about 700,000 dollars plus interest.

In a ruling last month the Mass. Appellate Tax Board denied the request, ruling the expenses, including snow removal and catering services were “Incidental" to the government contracts.

Raytheon reported earnings of $426 million for the 2nd Quarter 2008. This was down from 1.3 billion in the 2007 2nd Quarter which was high by 1.0 billion due to the sale of the aircraft division. Sales rose 11% to 5.9 billion attributable to programs such as missiles and laser guided bombs.

The company raised its outlook for the year to between $3.80 and $3.95 per share, an increase of 15 cents. Sales are expected for the year to be approximately 23 billion.

Raytheon's surface launched medium range air to air missiles successfully completed system field integrations demonstrative interoperability with both Patriot and Avenger Weapon systems. Avenger fire units with stinger missiles under the SLAMRAAM command and control received targeting data directly from the system allowing precise slew to cue of the gunner turret to targets. SLAMRAAM and Patriot exchanged and displayed unit position and air track data to form a common operational air picture between the two air defense systems.

The U.S. Army selected Raytheon's Excalibur as a best invention of 2007. Excalibur precision-guided artillery projectile received a top 10 Army Greatest Inventions of the Year Award for 2007. Excalibur is a 155MM Artillery projectile guided by a GPS/Inertial Navigation System. It gives soldiers an artillery round with precision guidance and extended range.

Senator Kennedy and numerous other senators launched a counteroffensive against the Navy's decision to scrap a $20 billion destroyer program that was to deliver huge contracts to Raytheon and Bath Iron Works. They want the Navy to provide more explanation as to why it won't buy more of the DDG-1000 Zumwalt class or ships after the first two are finished around 2014. Once known as the "DD-X" design, the Zumwalt class is known for its low-profile, radar evading hull. The ships are packed with advanced electronics that allow them to be operated by a crew of 142, far fewer than for traditional destroyers.

By Al Swenson and excerpts from an article by Mark in the Feb 1, 2008 issue of the Lowell Sun

Raytheon Co. continued to receive substantial contract awards in the fourth quarter which also has improved Raytheon's prospects for 2008 as well. The company's fourth-quarter profit and sales exceeded analysts' forecasts. Raytheon is the fifth-largest defense company in the world and the major contributor to Massachusetts ranking of eighth in the nation.

Sales for the fourth quarter were reported by Raytheon of $6.0 billion and $21.3 billion for the year, both up 8 percent. They recorded record bookings for the quarter which resulted in a record backlog of $36.6 billion at the end of the year. Operating income was up 20% and resulted in earnings per share of $3.80 for 2007. The company repurchased 28.7 million shares for $1.6 billion during 2007. Also the company made $900 million in discretionary cash contributions to the Company’s pension plan in 2007 compared to $200 million in 2006.

The 2008 Financial Outlook by Raytheon has increased from prior guidance to 22 plus billion in net sales and $3.65 to $3.80 in earnings per share from continuing operations.

Raytheon's integrated defense systems unit. which is based in Tewksburv and builds the Patriot systems, also saw its sales rise 8 percent to $1.29 billion in the quarter. That was primarily due to growth in the U.S. Missile Defense Agency and international programs, while operating profit rose 12 percent to $211 million, the company said

The company also announced on October 15, 2007 that it entered a into an agreement to sell Flight Options to H.I.G. Capital, a private investment firm. The Board of Directors in October announced the intent to repurchase up to $2 billion of the Company’s outstanding common stock as circumstances warrant.

Raytheon announced that they have been awarded two contracts totaling $241.8 million to overhaul and upgrade 34 Phalanx Close-In Weapon System for the United States Navy and one system for the Royal Australian Navy They will also build 12 Land Based. Systems for the United States Army. Phalanx is a rapid –fire computer controlled radar and 20 mm gun system that automatically acquires, tracks, and destroys enemy threats.

An award of $36.1 million was received by the company from United States Air Force for the company for the Pave Way (TM) II guided bomb components. This is the third consecutive Air Force majority share award for Raytheon, setting a benchmark for affordability and performance of the Precision-Guided weapons market. First developed in 1968 the evolving Pave Way series for laser guided bombs revolutionized precision delivery against tactical targets.

Raytheon Wins A $232 Million Contract to Develop Guided Ammunition (Added 1/3/08)

Raytheon is leading a team including General Dynamics Corp. to develop precision-guided ammunition rounds for a new weapons system., the XM1111 Mid Range Munitions system uses infrared and a laser seeker for guidance The award is for development and does not include funding for manufacturing.

On May 18, 2007 Directors for the Association of Raytheon Retirees attended a meeting hosted by Rich Goglia, Vice President and Treasurer of Raytheon Company. Attending for the ARR were Joe D’Ambrose, Dave MacLellan, Tom DiPaolo, and Allen Swenson.

On Dec. 31, 2006 the Pension Fund totaled $13.8 billion and is distributed in investments within the allocation criteria established by the company. That criterion is 50-75% in Equity, 20-40% in debt securities, 2-7% in real estate, and 2-17% in other (including pension equity and cash). In the previous year the Fund grew by $1.7 billion which was primarily driven by the net gain in investments returns.

The company contribution was $.6 billion and benefit payments of $1.0 billion were made to retirees. The investment returns for 2006 was in excess of 15% and compares favorably with the major market indices.

The company utilizes a significant number of different investment firms to minimize risks. Additionally, the company employs a variety of investment strategies and diversifications in various equity markets that also minimizes risk. The company is required to fund annually, at a minimum, these pension costs which are calculated in accordance with Internal Revenue Services regulations and standards issued by the Cost Accounting Standards Board.

The pension fund performance is also periodically reviewed with the investment committee of the company.

Additional details and company comments may be found in the annual report of the company included in their Form 10k submittal to the Securities Exchange Commission.

Defense Department Honors Raytheon

Missile Systems Received A Perfect Score

Last modified: 08/11/09