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Raytheon Profits Down 34 per cent

2009-02-05 Raytheon, the US defence contractor, on Thursday said rising pension costs had cut fourth-quarter profit by 34 per cent from a year earlier, when it enjoyed a one-time tax gain.

The company's profits from continuing businesses fell to $421m, or $1.02 a share, from $634m, or $1.45 a share, in the same period a year earlier. It said in the fourth quarter it recorded a $45m, or $0.11 a share, unfavourable adjustment to reflect the impact of pension investment returns on existing contracts. Raytheon added that it made $160m more in discretionary cash contributions to its pension plans in the last quarter of 2008.

Sales were up 1.4 per cent to $6.1bn in the fourth quarter on the back of orders for its Patriot air and missile defence systems to customers in Asia and the Middle East.

Raytheon said it ended 2008 with a record order backlog of $38.9bn, up 6 per cent from a year earlier. The company also reaffirmed its net sales outlook for 2009 of between $24.3bn-$24.8bn.

"Raytheon had a successful 2008 with strong bookings, a record backlog and solid growth in sales and operating income," said William Swanson, Raytheon chairman and chief executive.

"Our advanced technologies, program performance and diverse portfolio of products and services are uniquely suited to meet customer requirements and position us well for the future."

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