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$RTN expects to see higher productivity and operational efficiencies at missiles in 2018. This is a broad portfolio. The company has seen growth in development and classified programs but there are slight impacts to margin. Overall, $RTN is pleased with the portfolio and the mix of programs and is optimistic on the missiles business growth.
$RTN's international sales were up 8.4% in 4Q17. In early January, the company booked a new direct commercial contract for Patriot capabilities worth over $1.5Bil. Domestic sales were up 7.9% in 4Q17. In the missile business, bookings grew 23% YoY, mainly driven by an increase in precision weapon contracts.
During 4Q17, net sales in $RTN’s Integrated Defense Systems segment increased 6% versus 4Q16. Intelligence, Information and Services segment net sales grew 4%. The Missile Systems segment posted an increase of 15% while Space and Airborne Systems posted a growth of 4% in net sales. Forcepoint net sales grew 9% versus 4Q16.
$RTN reported a 29% decrease in 4Q17 earnings. Net income attributable to Raytheon was $393MM or $1.35 per share compared to $555MM or $1.88 per share in 4Q16. 4Q17 results included an unfavorable $0.59 provisional tax-related impact due to the enactment of the Tax Cuts and Jobs Act. Net sales grew 8% to $6.8Bil versus last year.
An undisclosed member of the 14-nation group that own the combat-proven Patriot Integrated Air and Missile Defense System has awarded $RTN a direct commercial sales contract worth more than $1.5Bil for additional capability. The contract was awarded on Jan 4, 2018.
$RTN has completed Lot 1 production of the Small Diameter Bomb II, a new weapon that will give fighter pilots the ability to destroy moving targets at any time and in all-weather conditions. The US Air Force has also contracted with $RTN to produce Lots 2 and 3. $RTN is producing SDB II bombs at its manufacturing facility in Tucson, Arizona.
$RTN's subsidiary Raytheon BBN Technologies will help military planners understand the causes for conflict using tools developed with artificial intelligence and machine learning techniques. The work is being done under an award from the Defense Advanced Research Projects Agency's Causal Exploration of Complex Operational Environments program.
$RTN and Pivotal Software, Inc., announced that Raytheon has joined the Pivotal Ready Partner Program to assist the Department of Defense to develop software capabilities to more rapidly bring new technology to the military. This will help the DoD migrate legacy applications to the cloud and accelerate software development and delivery timelines.
$RTN said the US Air Force completed a series of successful flight tests of its next-generation Military-code GPS using an $RTN receiver onboard a B-2 Spirit at Edwards Air Force Base, California. This first ever M-code test onboard the B-2 is an important milestone for the US Government-led GPS Modernization effort.
$RTN said a Raytheon BBN Technologies-led team is developing prototype cryogenic memory arrays and a scalable control architecture under an award from the Intelligence Advanced Research Projects Activity Cryogenic Computing Complexity program. Raytheon BBN is the prime contractor leading a team that includes New York University, among others.
The government of Romania signed an agreement to purchase $RTN’s Patriot Integrated Air and Missile Defense system from the US Army. Romania will receive the Patriot Configuration 3 , the most advanced configuration available, as well as an undisclosed quantity of GEM-T and PAC-3 MSE interceptor missiles.
$RTN said the US Air Force has accepted its GPS Operational Control System launch and checkout system, also referred to as Block 0, signifying the company met all contractual requirements when it delivered the LCS to the service. The program is ready for the GPS III satellite launch in 2018. $RTN will deliver the full capability in 2021.
In 2018, $RTN expects a solid bookings year. The company believes book-to-bill will be above 1 looking into the overall year. Currently there are roughly 40 opportunities that are greater than $100MM, and about one-third of the total bookings are expected to come from international customers.
$RTN sees strong demand within its Integrated Air and Missile Defense portfolio both domestically and internationally. During 3Q17, the company received a booking of $492MM for the development of the Redesigned Kill Vehicle for the Ground-based Midcourse Defense System.