The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Raytheon missed on revenue and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank, and earnings per share increased significantly.
Margins grew across the board.
Raytheon chalked up revenue of $6.44 billion. The 16 analysts polled by S&P Capital IQ predicted revenue of $6.73 billion. Sales were 6.4% lower than the prior-year quarter's $6.89 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $1.74. The 18 earnings estimates compiled by S&P Capital IQ forecast $1.35 per share on the same basis. GAAP EPS of $1.57 for Q4 were 34% higher than the prior-year quarter's $1.17 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 22.0%, 200 basis points better than the prior-year quarter. Operating margin was 13.4%, 170 basis points better than the prior-year quarter. Net margin was 8.4%, 170 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $6.01 billion. On the bottom line, the average EPS estimate is $1.21.
Next year's average estimate for revenue is $25.12 billion. The average EPS estimate is $5.26.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Raytheon is outperform, with an average price target of $49.56.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Raytheon. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.