© Reuters
US defense contractor Raytheon reported a rise in revenue during the second quarter, boosted by the recovery of its commercial airline customers, but sales at its missile division were hit by supply chain problems.
“A strong start to the summer travel season drove continued top-line growth” that “exceeded our expectations,” Chief Executive Officer Greg Hayes said.
“Looking ahead, while we expect the global supply chain environment, labor availability and inflation to remain challenging in the near term, we are actively engaged with our customers and suppliers to meet demand,” he added.
Raytheon, one of the Pentagon’s top five contractors, reported $16.3 billion in sales for the second quarter, up 3 percent year over year. Net income was $1.3 billion, up 25 percent from the same period in 2021, resulting in earnings of 88 cents per share, missing analysts’ estimates of 92 cents, according to Refinitiv polling.
Sales within Pratt & Whitney and Collins Aerospace, which make commercial jet engines and other aircraft parts, respectively, rose 16 percent and 10 percent to $5 billion each as aftermarket and parts demand increased.
But Raytheon Missiles & Defense, which houses the Stinger missile program and jointly manufactures the Javelin missile with Lockheed Martin, had an 11 percent year-over-year decline in sales to $3.6 billion. The company attributed the decline to “ongoing supply chain constraints and expected declines in some ground warfare and air defense programs.”
Stingers and Javelins have been critical weapons for Ukrainian forces fighting the Russian invasion. During the quarter, the US placed its first order for Stingers in two decades, awarding Raytheon a $662 million contract for 1,300 missiles, as the Pentagon moved to replenish its stockpile.
Raytheon and other major defense contractors are bracing for a surge in demand as Western governments plan to increase demand spending following the outbreak of war in Ukraine.
