Raytheon Beats Estimates, Strong Growth Forecasted

Raytheon Co. (RTN) recently announced first-quarter results, which included robust bookings of $6.5 billion and record backlog of $37.7 billion. First-quarter earnings per share of 93 cents beat the consensus estimate by 12% and outpaced the year-prior result. RTN's growth is also evidenced by ROE of 13%, which is in line with the industry average. The annual dividend was hiked by 10% from $1.02 per share to $1.12. The quarterly cash dividend of 28 cents per share currently translates into dividend yield of 1.7%, which is above the industry average of 0.1%.

Full Analysis

Raytheon Company is a technology player specializing in defense, homeland security and other government markets throughout the world. With a history of innovation spanning 85 years, Raytheon provides state-of-the-art electronics, mission systems integration and other capabilities in the areas of sensing; effects; and command, control, communications and intelligence systems, as well as a broad range of mission support services. With headquarters in Waltham, Mass., Raytheon employs 72,000 people worldwide.

Growth

Raytheon recently announced first-quarter results, which included robust bookings of $6.5 billion and record backlog of $37.7 billion.

First-quarter earnings per share of 93 cents beat the consensus estimate by 12% and outpaced the year-prior result. The company noted that the higher earnings can be primarily attributed to increased volume, combined with lower net interest and pension expense.

"With the strong performance in the first quarter, the Company is off to a good start," said William H. Swanson, Raytheon's Chairman and CEO. "Our strong bookings, record backlog and solid operating performance demonstrate the Company is continuing to execute and is well positioned going forward."

Quarterly net sales reached $5.4 billion, reflecting an increase of 11% from the year-prior $4.8 billion.

RTN's growth is also evidenced by its return on equity [ROE] of 13%, which is in line with the industry average. The company�s net margin has demonstrated solid growth at a rate of 12%, while the industry average is lower at 8.7%.

Income

In the first quarter, Raytheon repurchased 5.5 million shares of common stock for $340 million, as part of its previously announced share repurchase program. This Growth & Income pick also saw an increase in its dividend as previously reported. The annual dividend was hiked by 10% from $1.02 per share to $1.12. The quarterly cash dividend of 28 cents per share currently translates into dividend yield of 1.7%, which is competitive within its industry as the company operates in an industry that offers little in terms of dividends. The current industry average stands at 0.1%.

Higher Estimates

Wall Street boosted earnings forecasts on the company's solid quarter. Six out of 14 covering analysts increased full-year 2008 projections from last month�s $3.87 per share to $3.90. The most accurate estimate is $3.91 per share.