Raytheon 2Q net drops after year-ago sale gain

The Waltham, Mass.-based company earned $426 million, or $1 per share, in the three months ended June 29, down from $1.33 billion, or $2.97 per share, in the same quarter last year, the company said Thursday. The 2007 second-quarter results were pumped up by $980 million in income from the sale of its aircraft division.

Without the gain, 2007 second quarter earnings would have been a much lower $355 million, or 79 cents per share.

Analysts polled by Thomson Financial were expecting 94 cents per share in quarterly earnings from continuing operations.

Raytheon also raised its outlook for 2008 by 15 cents to between $3.80 and $3.95 per share on sales of between $22.6 billion to $23.1 billion, citing anticipated strength across its businesses. Analysts expect $3.92 per share on revenue of $22.93 billion for the full year.

"All this bodes well for the future," Bill Swanson, Raytheon's CEO, said of the company's quarterly results and predicted strength for the rest of the year.

Sales rose 11 percent to about $5.9 billion, pushed higher by programs such as missiles and laser guided bombs, along with a contract Raytheon has with the United Kingdom to provide border surveillance and control. Results were also helped by work on an $11.2 billion contract with the U.S. Army to train soldiers.

Raytheon has done brisk business in work on missile defense systems, both for the United States and foreign companies like South Korea and Kuwait that are wary of nearby rogue states. Sales grew 8 percent to $1.26 billion in the company's integrated defense systems unit, which makes defense tools such as the Patriot system to shoot down incoming ballistic missiles.

Work on the UK border project helped push up sales 24 percent to $829 million in the intelligence and information systems division. Meanwhile, missile systems, maker of precision munitions, grew 9 percent to $1.36 billion.

One big project may be in doubt. The Navy reportedly has decided to build only two of the new high tech but costly DDG-1000 destroyers that it planned as part of its effort to build out the fleet. Raytheon is designing the electronic system and other technology for the ship.