Raytheon (RTN), a technology company specializing in defense, security and civil markets, has recorded a 12.91 percent increase in profit for the quarter ended Jun. 29, 2014.
The company earned $551 million or $1.76 a share in the second-quarter compared with $488 million or $1.50 a share a year ago. Adjusted earnings per share came in at $1.41, when analysts expected $1.59.
Revenue during the second-quarter dipped 6.77 percent to $5,701 million from $6,115 million in the last year period.
Gross margin expanded by 228 basis points over the last year period to 24.56 percent. Total expenses as a percentage of revenues decreased to 86.69 percent from 87.47 percent in the same period last year. That has resulted in improvement of 79 basis points in operating margins to 13.31 percent.
The company posted operating income of $759 million, compared with $766 million in the previous year period.
"Demand for Raytheon's innovative and affordable solutions from our global customers was strong in the quarter, and international opportunities in the second half of the year are significant," said Thomas A. Kennedy, Raytheon's CEO. "Second quarter sales, earnings and cash flow all exceeded our expectations, reflecting the continuing hard work and dedication of the Raytheon team."
Cash Flow
Raytheon Co has generated cash of $846 million from operating activities during the first half, up 122.05 percent or $465 million when compared with the last year period. The company has generated 7.55 cents of operating cash flow in every sales dollar for the first half, up from 3.18 cents in the same period last year.
The company has spent $21 million cash to meet investing activities during the first half, as against cash outgo of $291 million in the last year period. It has made net capital expenditure of $127 million during the first half, which was higher by 1.60 percent or $2 million, from a year ago.
The company's free cash flow accounted for 84.99 percent of operating cash flow for the first half, compared with 67.19 percent in the last year period.
The company has spent $860 million cash to meet financing activities during the first half, as against cash outgo of $811 million in the last year period. It has spent net of $532 million on repurchase of common stocks.
The company's cash dividend payment increased 5.83 percent or $20 million to $363 million. Dividend payment accounted for 42.91 percent of operating cash flow for the first half, compared with 90.03 percent in the same period previous year.
As on Jun. 29, 2014, the company's cash balance stood at $3,261 million, up 32.18 percent or $794 million from Jun. 30, 2013.
Working Capital
Raytheon has witnessed an increase in the working capital over the last one year. The company's working capital stood at $4,403 million as at Jun. 29, 2014, up $581 million or 15.20 percent from $3,822 million on Jun. 30, 2013. It registered an increase in current ratio to 1.75 as at Jun. 29, 2014 from 1.70 on Jun. 30, 2013.
Debt Position
Raytheon has witnessed an increase in long-term debt over the last one year. As on Jun. 29, 2014, long-term debt stood at $4,736 million, up 0.08 percent or $4 million, from Jun. 30, 2013.
The company total debt was 17.95 percent of total assets as on Jun. 29, 2014, compared with 17.94 percent on Jun. 30, 2013.
Interest coverage ratio, which determines how easily a company can pay interest expenses on outstanding debt, has declined to 14.06 from 14.45 in the same period last year.
Shares of the company gained 121 cents or 1.31 percent to close at $93.28 on Monday.
