WALTHAM, Mass. - Raytheon reported third quarter 2014 sales of $5.47 billion, down 6 percent from sales of $5.84 billion in the third quarter of 2013. Income for the quarter was $488 million compared to $517 million a year prior. Bookings for the quarter rose to $5.9 billion, compared to $5.7 billion last year.
"Raytheon's solid third quarter operating results reflect strong program execution and our continued focus on operational efficiency," said Thomas A. Kennedy, Raytheon's Chairman and CEO. "Bookings strength across our broad portfolio of proven technology solutions positions the company well for the future."
Backlog at the end of the third quarter was $33.2 billion, compared to $33.7 billion at year end 2013.
INDUSTRY SEGMENTS
Integrated Defense Systems
Integrated Defense Systems (IDS) had third quarter 2014 net sales of $1,428 million compared to $1,603 million in the third quarter 2013. The change in net sales was primarily due to the scheduled completion of production phases on certain international Patriot programs.
IDS recorded $230 million of operating income compared to $286 million in the third quarter 2013. The change in operating income was primarily driven by a change in program mix and lower volume.
During the quarter, IDS booked $301 million on the Standard Terminal Automation Replacement System (STARS) program for the Federal Aviation Administration (FAA). IDS also booked $212 million to provide radar digital processors for the Patriot system to the U.S. Army and international customers, $160 million to provide Patriot Guidance Enhanced Missile-Tactical (GEM-T) missiles for an international customer, $130 million on the All Electronic Tolling System (AETS) for the Massachusetts Department of Transportation (MassDOT), $109 million to provide Patriot engineering services support for U.S. and international customers, $105 million on the Wide Area Augmentation System Dual Frequency Operations (WAAS DFO) program for the FAA, and $91 million to provide Patriot technical and logistics support for Taiwan.
As previously announced on October 6, 2014, IDS was awarded $19.5 million for the Engineering and Manufacturing Development (EMD) phase of the Three Dimensional Expeditionary Long Range Radar (3DELRR)for the U.S. Air Force. The contract includes options that could bring the cumulative value of this award to $71.8 million. 3DELRR is one of the first programs under the DoD's Better Buying Power initiative to be designed for exportability, enabling U.S. forces, allies and security partners to benefit from the system. This award was protested on October 21, 2014.
Intelligence, Information and Services
Intelligence, Information and Services (IIS) had third quarter 2014 net sales of $1,478 million compared to $1,496 million in the third quarter 2013.
IIS recorded $125 million of operating income compared to $134 million in the third quarter 2013. The change in operating income was primarily driven by higher net program efficiencies in the third quarter 2013.
During the quarter, IIS booked $190 million on domestic and foreign training programs in support of Warfighter FOCUS activities. IIS also booked $174 million on a contract to provide intelligence, surveillance and reconnaissance (ISR) support to the U.S. Air Force. IIS booked $571 million on a number of classified contracts.
Missile Systems
Missile Systems (MS) had third quarter 2014 net sales of $1,477 million compared to $1,635 million in the third quarter 2013. The change in net sales was primarily driven by lower sales on U.S. Army programs and lower sales due to the planned transition from development to production on the Standard Missile-3 (SM-3) program.
MS recorded $190 million of operating income compared to $202 million in the third quarter 2013. The change in operating income was primarily due to lower volume, partially offset by improved program performance in the third quarter 2014.
During the quarter, MS booked $263 million for Tomahawk for the U.S. Navy and an international customer. MS also booked $244 million for Phalanx Weapon Systems for the U.S. Navy and international customers, $149 million for the Iron Dome Tamir Co-Production program for an international customer, $117 million for Laser Guided Rockets for an international customer, and $75 million for AIM-9X Sidewinder short-range air-to-air missiles for the U.S. Navy.
Space and Airborne Systems
Space and Airborne Systems (SAS) had third quarter 2014 net sales of $1,509 million compared to $1,556 million in the third quarter 2013. The change in net sales was primarily due to lower volume on intersegment sales.
SAS recorded $237 million of operating income compared to $224 million in the third quarter 2013. The increase in operating income was primarily due to improved program performance.
During the quarter, SAS booked $138 million to provide radar subsystems for the U.S. Navy. SAS also booked $92 million on an optical sensor satellite program for a commercial customer and $81 million to provide radar components for an international customer. SAS booked $523 million on a number of classified contracts.
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