WALTHAM, Mass. - Raytheon Co announced second quarter 2014 sales of $5.7 bilion, down almost 7 percent from sales of $6.1 billion in the second quarter of 2013. Net income for the period was $553 million compared to $488 million a year ago.
The company had bookings of $6.8 billion in the second quarter 2014, resulting in a book-to-bill ratio of 1.19. In the second quarter 2013, bookings were $5.3 billion. Year-to-date 2014 bookings were $11.1 billion compared to year-to-date 2013 bookings of $8.9 billion.
"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."
Backlog at the end of the second quarter was $33.0 billion and funded backlog was $23.6 billion. At year end 2013 backlog was $33.7 billion and funded backlog was $23.0 billion.
INDUSTRY SEGMENTS
Integrated Defense Systems
Integrated Defense Systems (IDS) had second quarter 2014 net sales of $1,549 million, down 10 percent compared to $1,721 million in the second quarter 2013. The change in net sales was primarily due to the scheduled completion of production phases on certain international Patriot programs, as well as lower sales on a combat tactical radar program and the Australian Air Warfare Destroyer (AWD) program.
IDS recorded $219 million of operating income compared to $326 million in the second quarter 2013. The change in operating income was driven by lower volume and a $38 million adjustment from a decrease in estimated incentive fees on the AWD program due to an increase in the shipbuilder's expected cost to complete their portion of the program. In addition, second quarter 2013 included a favorable contract modification.
Intelligence, Information and Services
Intelligence, Information and Services (IIS) had second quarter 2014 net sales of $1,518 million, down 3 percent compared to $1,570 million in the second quarter 2013. The change in net sales included lower volume on training and mission support programs, partially offset by higher volume on domestic and international classified programs.
IIS recorded $127 million of operating income compared to $131 million in the second quarter 2013.
During the quarter, IIS booked $515 million on domestic training programs and $160 million on foreign training programs in support of Warfighter FOCUS activities. IIS also booked $521 million for a U.S. Air Force program and approximately $160 million to provide operations and maintenance services on an international radar system. IIS booked $379 million on a number of classified contracts.
Missile Systems
Missile Systems (MS) had second quarter 2014 net sales of $1,539 million compared, down to $1,690 million in the second quarter 2013. The change in net sales was primarily driven by lower sales on U.S. Army programs.
MS recorded $190 million of operating income compared to $213 million in the second quarter 2013. The change in operating income was primarily due to lower volume and program mix, partially offset by improved program performance in the second quarter 2014.
During the quarter, MS booked $764 million for Tube-launched, Optically-tracked, Wireless-guided (TOW) missiles for the U.S. Army, U.S. Marines and international customers, $289 million for Standard Missile-6 (SM-6) for the U.S. Navy, $259 million for AIM-9X Sidewinder short range air-to-air missiles for the U.S. Navy, U.S. Air Force and international customers, $179 million for Advanced Medium-Range Air-to-Air Missiles (AMRAAM) for the U.S. Air Force, U.S. Navy and international customers, $130 million for Phalanx weapon systems for the U.S. Navy and U.S. Army, $81 million on Miniature Air-Launch Decoy (MALD®) for the U.S. Air Force, $79 million for Rolling Airframe Missile (RAM) program for the U.S. Navy and international customers, and $75 million for Standard Missile-3 (SM-3™) for the Missile Defense Agency (MDA). MS also booked $140 million on a classified program.
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