Raytheon Crushes Earnings Estimates

Raytheon (NYS: RTN) reported earnings on July 25. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Raytheon beat expectations on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded slightly. Non-GAAP earnings per share grew significantly. GAAP earnings per share increased.

Gross margins shrank, operating margins grew, net margins increased.

Revenue details
Raytheon booked revenue of $6.12 billion. The 17 analysts polled by S&P Capital IQ foresaw a top line of $5.81 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $1.64. The 19 earnings estimates compiled by S&P Capital IQ predicted $1.31 per share. Non-GAAP EPS of $1.64 for Q2 were 16% higher than the prior-year quarter's $1.41 per share. GAAP EPS of $1.50 for Q2 were 6.4% higher than the prior-year quarter's $1.41 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 22.3%, 10 basis points worse than the prior-year quarter. Operating margin was 12.5%, 10 basis points better than the prior-year quarter. Net margin was 8.0%, 10 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $5.84 billion. On the bottom line, the average EPS estimate is $1.31.

Next year's average estimate for revenue is $23.52 billion. The average EPS estimate is $5.44.

Investor sentiment

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Raytheon is hold, with an average price target of $63.53.

Looking for alternatives to Raytheon? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.

• Add Raytheon to My Watchlist.