Raytheon reported slightly lower third-quarter profit Thursday, hurt by losses from a unit it is selling, and forecast next year's profit below Wall Street's average estimate, sending its shares down almost 3 percent.
The U.S. No. 5 defense contractor, which makes Patriot and Tomahawk missiles, reported higher sales of its military equipment, but that was offset by a one-time charge relating to the sale of its Flight Options private jet chartering unit, announced Thursday.
The sale of the Flight Options unit to HIG Capital, for an undisclosed sum, comes after the company sold its business jet unit, Raytheon Aircraft, earlier this year.
Raytheon said it would take a further charge on the sale in the fourth quarter, as the deal is completed.
Raytheon, based in Waltham, Massachusetts, reported quarterly net profit of $299 million, or 68 cents per share, compared with $321 million, or 71 cents, a year ago.
Excluding the Flight Options sale charge, worth $69 million after tax, Raytheon reported profit from continuing operations of 86 cents per share. On that basis, Wall Street was expecting 81 cents per share, on average, according to Reuters Estimates.
Raytheon said it would take another charge of about $45 million after tax in the fourth quarter relating to the sale, depending on the final price of the deal, which has not yet been established.
Raytheon's sales for the quarter rose 8 percent to $5.4 billion. Analysts were expecting $5.36 billion, on average.
The company left its forecast of full-year earnings of $3.05 to $3.20 per share unchanged. Analysts are expecting $3.24 per share, on average.
For 2008, it forecast earnings from continuing operations of $3.45 to $3.65 per share. Analysts are expecting $3.77 per share, on average.
"With expectations seemingly high going into the quarter, the lack of an uptick to 2007 guidance and the somewhat underwhelming 2008 number may disappoint," Bank of America analyst Robert Stallard said in a research note.
The company also said it had authorized the repurchase of up to $2 billion of its own shares.