Raytheon is hit by a key contract loss
DEFENCE contractor Raytheon reported lower net income yesterday and cut its full-year sales and profit forecasts, citing a termination notice on a UK border security programme.
Net income at the New York-listed firm came to $208m (£133m), or 55 cents a diluted share, in the second quarter, compared with $489m, or $1.23 a share, a year earlier.
The missile maker said the termination notice by the UK Border Agency cut profit by 71 cents a share. It said it was required to recognise the potential financial effect of the termination notice in the second period, and added it intends to pursue collection of unbilled receivables and damages. The latest results also included pension expense of nine cents a share. Adjusted for items, profit came to $1.27 a share, compared with $1.19 a share expected by analysts.
The UK government ended the contract under which Raytheon provided technology to carry out security checks on travellers earlier this month. Sales fell two per cent to about $6bn, compared with $6.43bn expected by analysts. The UK programme termination cut quarterly sales by $316m. Raytheon said it now expects full-year earnings from continuing operations in the range of $4.00 a share to $4.15 a share, down from its prior view of $4.75 to $4.90.