Raytheon shares drop on lower outlook

Raytheon Co. posted higher fourth-quarter sales and profits on Thursday, but its shares fell after the defense contractor issued a 2015 profit forecast that fell short of Wall Street estimates.

Raytheon’s Tucson-based Missile Systems unit reported 5 percent increases in both fourth-quarter sales and operating income, but sales and income for all of 2014 were down 4 percent from 2013.

The parent company said it expects to earn between $6.20 and $6.35 per share from continuing operations in 2015, and it forecast $22.3 billion to $22.8 billion in revenue. That means it believes revenue will fall as much as 2 percent.

FactSet says analysts were projecting net income of $6.88 per share and $22.59 billion in revenue on average.

Raytheon shares were down about 3 percent in late-afternoon trading on the New York Stock Exchange.

The stock has risen 17 percent in the last 12 months, but as of Wednesday’s close the shares were down 3 percent this year, about the same as the Standard & Poor’s 500 index.

The parent company reported net income from continuing operations of $582 million, or $1.86 per share, for the fourth quarter. After pension-cost adjustments, quarterly earnings were $1.71 per share. The Waltham, Massachusetts-based company said its revenue rose to $6.14 billion.

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Anlyasts tracked by Zacks Investment Research expected earnings of $1.78 per share and $6.06 billion in revenue.

For the full year Raytheon said it earned $2.2 billion, or $6.97 per share, from continuing operations as net sales declined about 4 percent to $22.8 billion.

Raytheon Missile Systems, one of four Raytheon business units that report operating results, posted net sales of $1.7 billion in the fourth quarter, up from $1.6 billion in the same period in 2013, as operating income rose 5 percent to $212 million.

But for all of 2014, Missile System’s sales fell 4 percent to $6.31 billion while net income fell to $800 million.

Raytheon said the increase in quarterly sales was mainly driven by higher sales on the Advanced Medium-Range Air-to-Air Missile (AMRAAM) and Evolved Sea Sparrow Missile (ESSM) programs, while blaming the drop in annual operating income on lower sales volumes.

During the quarter, Raytheon said, Missile Systems booked $509 million in revenue for AMRAAM and $146 million for ESSM.

Assistant Business Editor David Wichner and The Associated Press contributed to this report.