Raytheon Company (RTN - Analyst Report) reported first-quarter 2015 earnings from continuing operations of $1.78 per share, beating the Zacks Consensus Estimate of $1.43 by 24.5%.

The reported number decreased 4.8% from $1.87 per share in the year-ago quarter, mainly due to lower revenue generation. The world’s largest missile maker, Raytheon, is known for its overseas exposure.

Raytheon Company - Quarterly EPS | FindTheCompany

Operational Performance

The company’s first-quarter revenues at $5,288 million registered a 4% decline year over year. The reported number however came in above the Zacks Consensus Estimate of $5,249 million by 0.7%.

New bookings in the first quarter were $4,471 million compared with $4,293 million in the year-ago period, reflecting 4.1% growth. Total backlog at the end of the quarter stood at $32.49 billion (down from $33.57 billion at 2014 end) while funded backlog was $23.72 billion (up from $23.09 billion at 2014 end).

Total operating expenses were $4,448 million, down 5.8% year over year. Operating income of $840 million increased almost 7% year over year from $788 million.

Quarterly Segment Performance

Integrated Defense Systems (IDS): Segment revenues decreased 3.2% year over year to $1,433 million due to lower sales from international Patriot programs. Segment operating income dropped 14% year over year to $195 million.

Intelligence, Information and Services (IIS): Segment revenues were down 3.9% year over year to $1,393 million due to lower volume on training programs. Operating income in the reported quarter jumped to $285 million from $125 million a year ago.

Missile Systems (MS): Segment revenues also suffered a 6.4% year-over-year decline to $1,473 million. Lower sales from Tomahawk and Standard Missile-3 (SM-3) programs led to the decrease. Operating income fell $1 million to $207 million from $208 million a year ago.

Space and Airborne Systems (SAS): Revenues in the quarter dropped 2.9% year over year to $1,358 million. This was due to lower sales volume on secure communication systems programs. Operating income declined 9% year over year to $173 million due to lower volumes.

Financial Update

Raytheon ended the first quarter with cash and cash equivalents of $2,906 million, down from $3,222 million as of Dec 31, 2014. Long-term debt was $5,331 million, up from an outstanding debt of $5,330 million as of Dec 31, 2014.

Raytheon’s capital expenditure of $55 million in the reported quarter rose from $39 million a year ago.

In the first quarter, Raytheon repurchased 2.8 million shares of common stock for $300 million.

Guidance

Raytheon raised its 2015 earnings guidance in spite of the first quarter decline.

For 2015, Raytheon now expects earnings in the range of $6.67−$6.82 per share, up from its earlier projection of $6.20−$6.35 per share from continuing operations.

Raytheon reaffirmed 2015 revenues between $22.3 billion and $22.8 billion.

It expects 2015 operating cash flow from continuing operations in the range of $2.4−$2.7 billion, up from $2.3−$2.6 billion earlier.

At the Peers

Lockheed Martin Corp. (LMT - Analyst Report) posted first-quarter 2015 earnings of $2.74 per share, comfortably surpassing the Zacks Consensus Estimate of $2.48 by 10.5%. Earnings in the reported quarter however declined 4.5% from $2.87 per share a year ago, as lower fighter jet demand led to less revenue.

The Boeing Company (BA - Analyst Report) delivered first-quarter 2015 adjusted earnings of $1.97 per share, beating the Zacks Consensus Estimate of $1.81 by 8.8%. The quarterly number rose an impressive 11.9% from $1.76 per share a year ago.

Upcoming Release

General Dynamics Corp. (GD - Analyst Report) is slated to report first-quarter 2015 results on Apr 29, 2015, before the opening bell.

Zacks Rank

Raytheon holds a Zacks Rank #3 (Hold).