Raytheon Reports Strong First Quarter Results

WALTHAM, Mass. , April 24, 2008 /PRNewswire-FirstCall/ -- Raytheon Company (NYSE: RTN) reported first quarter 2008 income from continuing operations of $400 million or $0.93 per diluted share compared to $324 million or $0.71 per diluted...


WALTHAM, Mass. , April 24, 2008 /PRNewswire-FirstCall/ -- Raytheon Company (NYSE: RTN) reported first quarter 2008 income from continuing operations of $400 million or $0.93 per diluted share compared to $324 million or $0.71 per diluted share in the first quarter 2007. First quarter 2008 income from continuing operations was higher primarily due 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."

First quarter 2008 net income was $398 million or $0.92 per diluted share compared to $346 million or $0.76 per diluted share in the first quarter 2007. Net income for the first quarter 2008 included an after-tax loss of $2 million or $0.01 per diluted share in discontinued operations compared to income of $22 million or $0.05 per diluted share in the first quarter 2007 primarily due to the results of Raytheon Aircraft Company, which was sold in the second quarter 2007.

Net sales for the first quarter 2008 were $5.4 billion, up 11 percent from $4.8 billion in the first quarter 2007.

Operating cash flow from continuing operations for the first quarter 2008 was a positive $67 million compared to an outflow of $353 million for the first quarter 2007. First quarter 2007 included a $400 million discretionary cash contribution made to the Company's pension plans.

In the first quarter 2008 the Company repurchased 5.5 million shares of common stock for $340 million, as part of the Company's previously announced share repurchase program. In addition, as announced in March 2008 , the Company's Board of Directors voted to increase the Company's annual dividend by 10 percent from $1.02 to $1.12 per share.

The Company reported total bookings for the first quarter 2008 of $6.5 billion compared to $5.2 billion in the first quarter 2007. The Company ended the first quarter 2008 with a record backlog of $37.7 billion compared to $36.6 billion at the end of 2007 and $33.9 billion at the end of the first quarter 2007.

The Company reaffirms full-year 2008 guidance. Charts containing additional information on the Company's 2008 guidance are available on the Company's website at www.raytheon.com . See attachment F for the Company's calculation and use of Return on Invested Capital (ROIC), a non-GAAP financial measure.

Integrated Defense Systems (IDS) had first quarter 2008 net sales of $1,192 million, up 9 percent compared to $1,092 million in the first quarter 2007, primarily due to growth on Missile Defense Agency and U.S. Army programs. IDS recorded $211 million of operating income compared to $199 million in the first quarter 2007. The increase in operating income was primarily due to higher volume and the sale of licensed software.

During the quarter, IDS booked an initial $331 million for the design, development and support of the Patriot system for international customers, including $246 million for South Korea and $85 million for Taiwan . IDS also booked $133 million to provide engineering services support for a Patriot air and missile defense program for the U.S. Army.

Intelligence and Information Systems (IIS) had first quarter 2008 net sales of $692 million, up 18 percent compared to $588 million in the first quarter 2007, primarily due to new programs, including U.K. e-Borders. IIS recorded $52 million of operating income compared to $55 million in the first quarter 2007. The decrease in operating income was primarily due to certain acquisition costs and other investments in cyber operations and information security capabilities, partially offset by higher volume.

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