Raytheon Company (NYSE:RTN) Q4 2014 Earnings Conference Call - Final Transcript

Jan 29, 2015 • 09:00 am ET


Raytheon Company (NYSE:RTN) Q4 2014 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to the Raytheon Fourth Quarter 2014 Earnings Conference Call. My name is Taheesha, and I will be your operator for today. At this time, all participants are in listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the conference over to your host for today, Mr. Todd Ernst, Vice President of Investor Relations. Please proceed.

Todd B. Ernst

Thank you, Taheesha. Good morning, everyone. Thank you for joining us today on our fourth quarter conference call. We announced this morning the audio feed of this call and the slides that we'll reference are available on our website at raytheon.com. Following this morning's call, an archive of both the audio replay and the printable version of the slides will be available in the Investor Relations section of our website.

With me today are Tom Kennedy, our Chairman and Chief Executive Officer, Dave Wajsgras, our Chief Financial Officer and Toby O'Brien, who will formally take over as CFO on March 2 of this year. We'll start with some brief remarks by Tom and Dave and then we'll move on to questions.

Before I turn the call over to Tom, I'd like to caution you regarding our forward-looking statements. Any matters discussed today that are not historical facts, particularly the comments regarding the company's future plans, objectives and expected performance constitute forward-looking statements. These statements are based on a wide range of assumptions that the company believes are reasonable, but are subject to a range of uncertainties and risks that are summarized at the end of our earnings release and are discussed in detail in our SEC filings.

With that, I'll turn the call over to Tom. Tom?

Thomas A. Kennedy

Thank you, Todd. Good morning, everyone. Raytheon concluded 2014 with a strong fourth quarter, driven by global demand for advanced technologies and solid executions across the company. Bookings were better than expected at $7.1 billion, yielding a book-to-bill ratio of 1.16 for Q4. Sales were up nearly 5% in the quarter as both domestic and international sales increased, and cash flow and margins were strong as well. These results were made possible by the dedicated efforts of the entire Raytheon team and I want to thank everyone on the team for the strong quarter and solid year.

As I look back on 2014, I'm pleased with our overall performance. We had a book-to-bill ratio of 1.05 for the year. Bookings of $24.1 billion exceeded the high end of our expectations. The company capitalized on key domestic and international opportunities in missile defense, electronic warfare, cybersecurity, C4ISR and training. This highlights our continued alignment with our customers' priorities and our strong competitive position.

Furthermore, we're especially proud that we delivered better-than-expected bookings performance, even as one of our anticipated large international Patriot awards moved into the first quarter of 2015. Operationally, we continue to focus on reducing costs, improving affordability and delivering strong returns, while at the same time, we follow