By Mike Stone and Shivansh Tiwary
(Reuters) -Stinger missile maker Raytheon Technologies Corp on Tuesday beat analysts’ estimates for fourth-quarter profit, as the aerospace and defense company fed off strong travel demand across the globe that boosted demand for its jet engines, parts and services.
Strong travel demand and supply chain disruptions have forced airlines to fly older planes for a longer period, boosting demand for high-margin after-market services at companies such as Raytheon, which counts Boeing Co and Airbus SE among its customers.
Raytheon reported an adjusted net income of $1.27 per share in the quarter ended Dec. 31, above analysts’ average estimate of $1.24 per share, according to Refinitiv data.
“As I look back 12 months ago, we set some expectations. And I would say the commercial aerospace recovery was right in line with the high end of those expectations,” Neil Mitchell, the company’s chief financial officer, said in an interview, but in 2023 he expects headwinds from taxes and pensions.
Shares in the defense firm were up 1% in pre-market trading to $97.20.
The maker of Tomahawk missiles forecast 2023 adjusted profit in the range of $4.90 to $5.05 per share, compared with analysts’ average estimate of $5.03 per share.
The Arlington, Virginia-based company’s avionics unit, Collins Aerospace, reported a 14.6% increase in its quarterly sales and a 60.7% jump in operating profit in the reported quarter.
Net sales were up 6.2% at $18.09 billion, but missed analysts’ average estimate of $18.15 billion.
The defense industry, even though hit by supply chain snarls, has gained from geopolitical tensions since Russia’s invasion of Ukraine 11 months ago, pushing countries to ramp up defense budgets.
Raytheon’s missiles and defense unit’s sales were up 6.2% to $4.1 billion in the fourth quarter.
The company expects share repurchases of $3 billion in 2023 and said it will realign its portfolio to three business segments including Collins Aerospace, Pratt & Whitney and Raytheon, down from four segments.
(Reporting by Mike Stone in Washington and Shivansh Tiwary in Bengaluru; Editing by Shinjini Ganguli and Mark Porter)
