- Summary: Buoyed by demand for military electronics and information-technology services, defense contractors Raytheon Co. (RTN) and Northrop Grumman Corp. (NOC), reported higher second-quarter profits and raised their earnings outlooks for 2006 while L-3 Communications (LLL), reported a loss because of charges, including one related to the backdating of stock options. Quarterly profit rose 54% at Raytheon and 17% at Northrop Grumman. Raytheon said net income was $310 million, or 69 cents a share, compared with $201 million, or 44 cents a share, in the year-earlier quarter. Sales were $5.71 billion, up 5.6% from $5.41 billion a year earlier. Northrop reported net income of $430 million, or $1.23 a share, compared with $367 million, or $1 a share, in the year-earlier period. Sales fell 2.6% to $7.60 billion from $7.81 billion. Meanwhile, L-3 said second-quarter net fell 58% to $49.8 million, or 40 cents a share, from $119.4 million, or 99 cents a share, during the year-earlier period. The company, reported that quarterly sales rose 49% to $3.08 billion from $2.08 billion a year earlier.
- Comment on related stocks/ETFs: According to Enzio von Pfeil, Raytheon should continue to have an upside based on U.S. defense cooperation with Japan. Read his piece Raytheon to Benefit from New U.S.-Japan Defense Cooperation to find out more.
Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):