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Jan 25, 2000 - 06:41 PM

Raytheon's Fourth-Quarter Earnings Drop 79 Percent, Below Expectations

The Associated Press

LEXINGTON, Mass. (AP) - Raytheon Co. said Tuesday its fourth-quarter earnings plunged 79 percent, a drop larger than Wall Street analysts had projected for the defense contractor.

The company blamed a decline in revenue on lower missile shipments as well as aircraft production delays and accounting changes mandated by the Securities and Exchange Commission.

Net income was $72 million, or 21 cents a share, in the October-December period, down from $341 million, or $1 per share, a year earlier. Analysts surveyed by First Call/Thomson Financial had predicted earnings of 22 cents a share.

Raytheon said that accounting changes to bring it in compliance with SEC rules resulted in fourth-quarter costs of 11 cents a share.

Revenue was $4.83 billion, down 8 percent from $5.26 billion the previous year.

Raytheon last week warned investors that fourth-quarter earnings would be lower than projected for the second straight quarter. The warning came after the company announced plans in November to eliminate its biggest division, Raytheon Systems Co., streamline management, and revise the way financial information is shared within the company.

Class B shares in Raytheon rose $1.68, or 9 percent, to $20 in trading at 5:15 p.m. on the New York Stock Exchange. Class A shares rose $1.56, or 8.5 percent, to $19.87 1/2.

Net income for the year was $404 million, or $1.19 a share, compared with $844 million, or $2.47 a share, in 1998. Excluding a $53 million accounting charge, net income in 1999 was $457 million, or $1.34 a share.

Revenue for the year was $19.84 billion, up 2 percent from $19.42 billion in 1998. The company said the increase reflected stronger sales in missile defense systems and some improvement in the power business of Raytheon Engineers & Constructors.

-- snooze button (alarmclock_2000@yahoo.com), January 26, 2000

Answers

"Raytheon said that accounting changes to bring it in compliance with SEC rules resulted in fourth-quarter costs of 11 cents a share."

"Not Y2K related" of course!

-- Hawk (flyin@high.again), January 26, 2000.

Good catch Hawk!

-- Hokie (Hokie_@hotmail.com), January 26, 2000.