US defence contractor Raytheon reported an increase in revenue during the second quarter, boosted by the recovery of its commercial airline customers, but sales in its missiles division were hit by supply chain issues.
“A strong start to the summer travel season drove continued top-line growth” that “exceeded our expectations”, said chief executive Greg Hayes.
“Looking ahead, while we expect the global supply chain environment, labour availability and inflation will remain challenging 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 $16.3bn in sales for the second quarter, up 3 per cent year-over-year. Net income was $1.3bn, up 25 per cent over the same period of 2021, resulting in earnings of 88 cents a share, missing analyst estimates of 92 cents, as polled by Refinitiv.
Sales within Pratt & Whitney and Collins Aerospace, which make commercial jet engines and other jet parts, respectively, were up 16 per cent and 10 per cent to $5bn each as after-market and parts demand rose.
But Raytheon Missiles & Defense, which houses the Stinger missile programme and jointly produces the Javelin missile with Lockheed Martin, had an 11 per cent year-over-year drop in sales to $3.6bn. The company attributed the drop to “continuing supply chain constraints and expected declines on certain land warfare and air defence programmes”.
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 $662mn contract for 1,300 missiles, as the Pentagon moved to replenish its stockpile.
Raytheon and other major defence contractors are gearing up for an increase in demand as western governments plan to increase demand spending following the outbreak of war in Ukraine.