Raytheon (RTN) said Thursday its third-quarter earnings fell 2.8% amid declining revenue, but the defense contractor lifted its outlook after topping forecasts.
The Waltham, Mass.-based weapons maker now expects a per-share profit of $5.67 to $5.77, up from $5.51 to $5.61. It also raised the high-end of its revenue estimate by $100 million to $23.8 billion.
Raytheon said it expects more opportunities to win overseas orders in the near future, while the company has already scored key contracts related to its missile-defense unit.
Raytheon’s profit checked in at $487 million for the third quarter, compared to $501 million in the year-ago period. Per-share earnings remained flat at $1.51. Earnings from continuing operations slipped two cents to $1.60 but handily beat the $1.32 consensus estimate.
Revenue was down 3.3% at $5.84 billion.
The company said its backlog was down 11% to $32.2 billion, although it noted overseas sales tend to accumulate in the fourth quarter. Aided by new U.S. Navy radar contracts, third-quarter bookings were $5.7 billion and raised Raytheon’s book-to-bill ratio to 97%.
However, Lockheed Martin (LMT) filed a formal protest with the Navy over the contract win, a move that forced Raytheon to halt work on the project until an official ruling is given.
Raytheon, the No. 4 U.S. defense contractor by revenue, followed stronger-than-expected earnings from other Pentagon suppliers like United Technologies (UTX) and Lockheed Martin, the world’s largest defense contractor.
Each of the five top U.S. contractors beat profit expectations in the third period even as the Pentagon trims its budget.
In a statement, Raytheon CEO William Swanson said the “overall economic environment has been challenging.”
Shares fell 1.4% to $77.39 in mid-morning trading, paring year-to-date gains of 36% as of Wednesday’s close.