By Andrea Shalal
WASHINGTON (Reuters) - Raytheon Co (N:RTN) on Thursday reported better-than-expected fourth-quarter profit and forecast higher results for 2016, citing increasing demand from the Middle East, Asia and Europe for precision missiles and missile defense.
Chief Executive Officer Tom Kennedy told analysts that lower oil prices were not hurting demand from the Middle East, and several countries were looking to upgrade existing Patriot missile defense systems.
Revenues should rise 3 percent to 5 percent this year, up from an earlier forecast of 3 percent to 4 percent, Chief Financial Officer Toby O'Brien said.
Earnings per share were forecast to increase to $6.80 to $7.00 in 2016, from $6.75 per share in 2015, driven by domestic and international demand for its products and services.
Raytheon said international sales hit a record 31 percent of the total in 2015, while total revenues rose 2 percent to $23.2 billion, and should be in the same range this year.
Kennedy said Raytheon saw about $5 billion in potential Patriot sales around the world, including a large deal with Poland that could be completed this year. Upgrades to existing systems could add billions more, he said.
The company also sees more international demand across Raytheon's portfolio of products and services, including cybersecurity, Kennedy said.
O'Brien said the company was still looking at smaller acquisitions for both its commercial and defense business as it continued to integrate the $1.9 billion Forcepoint cyber acquisition last year.
Raytheon shares rose 2.2 percent at $120.65 as analysts lauded the better-than-expected revenue forecast.
Quarterly net earnings fell to $571 million, or $1.85 per share, from $582 million, or $1.86, a year earlier, while revenues rose 3 percent to $6.3 billion.
The acquisition of Forcepoint lowered earnings per share by 8 cents, as expected, Raytheon said.
Analysts polled by Thomson Reuters I/B/E/S looked for earnings per share of $1.81 and $6.3 billion in revenues.
Full-year revenue grew for the first time since 2010, a year earlier than expected, and were expected to rise 3 percent to 5 percent this year, up from an earlier forecast of 3 percent to 4 percent, O'Brien said.
O'Brien said domestic sales were slated to rise in 2015 for the first time since 2009, with a budget agreement signed last year providing stability and higher funding levels for the future.