January 30, 2020 / 11:55 AM / a month ago

Weapons maker Raytheon tops profit estimates on strong international demand

Jan 30 (Reuters) - U.S. weapons maker Raytheon Co topped Wall Street estimates for quarterly profit on Thursday as strong international demand spurred sales in its defense systems unit, which makes the Patriot missile-defense system and surveillance radars.

Defense contractors are expected to benefit from tensions between the United States and Iran after a top Iranian military commander was killed in a U.S. drone strike in Baghdad on Jan. 3, prompting Iran to retaliate with a missile attack against a U.S. base in Iraq days later.

Sales in Raytheon’s integrated defense systems unit, which also makes naval navigation systems and torpedoes, rose 17.6% to $1.98 billion in the fourth quarter ended Dec. 31. Margins in the unit rose to 15.5% from 14.7%.

The company’s defense unit gained from two international missile defense orders received in the third quarter, and also booked contracts for its Patriot missile-defense system worth $1.1 billion.

Sales at Raytheon’s missile systems unit, its largest, rose 1.2% to $2.35 billion in the quarter, while margins increased to 12.7% from 11.8%. The unit makes weapons including radar threat-countering high-speed anti-radiation missiles and rapid-fire, radar-guided guns for ships.

The company said that its planned $120 billion merger with United Technologies Corps is expected to close early in the second quarter of this year.

Raytheon’s earnings from continuing operations rose to $3.16 per share in the quarter, from $2.93 per share a year earlier, beating analysts’ average estimate of $3.12 per share, according to IBES data from Refinitiv.

Total sales rose 6.5% to $7.84 billion, but were below Wall Street’s estimate of $8.01 billion. (Reporting by Sanjana Shivdas in Bengaluru; Editing by Krishna Chandra Eluri)

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