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Raytheon Co. (NYSE:RTN)

This company has been moved to the archive! The financial data has not been updated since February 12, 2020.

Common-Size Income Statement
Quarterly Data

Raytheon Co., common-size consolidated income statement (quarterly data)

Microsoft Excel
3 months ended: Dec 31, 2019 Sep 29, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018 Jul 1, 2018 Apr 1, 2018 Dec 31, 2017 Oct 1, 2017 Jul 2, 2017 Apr 2, 2017 Dec 31, 2016 Oct 2, 2016 Jul 3, 2016 Apr 3, 2016 Dec 31, 2015 Sep 27, 2015 Jun 28, 2015 Mar 29, 2015
Products 85.34 83.09 83.73 82.66 84.46 83.10 83.12 83.84 85.39 84.42 83.98 84.07 84.67 83.84 83.46 83.10 84.24 83.54 83.69 82.96
Services 14.66 16.91 16.27 17.34 15.54 16.90 16.88 16.16 14.61 15.58 16.02 15.93 15.33 16.16 16.54 16.90 15.76 16.46 16.31 17.04
Net sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Cost of sales, products -62.75 -60.73 -60.09 -59.47 -61.11 -58.33 -58.91 -59.63 -64.38 -61.62 -61.73 -62.60 -62.17 -61.74 -59.09 -62.43 -63.04 -62.86 -63.73 -58.55
Cost of sales, services -11.62 -13.12 -12.61 -13.00 -12.16 -13.24 -13.19 -12.69 -11.85 -13.02 -12.86 -12.90 -12.46 -13.04 -13.49 -13.92 -12.94 -13.37 -13.65 -13.94
Cost of sales, products and services -74.37% -73.85% -72.71% -72.48% -73.27% -71.57% -72.11% -72.32% -76.23% -74.63% -74.59% -75.50% -74.62% -74.79% -72.58% -76.35% -75.98% -76.22% -77.38% -72.48%
Gross margin 25.63% 26.15% 27.29% 27.52% 26.73% 28.43% 27.89% 27.68% 23.77% 25.37% 25.41% 24.50% 25.38% 25.21% 27.42% 23.65% 24.02% 23.78% 22.62% 27.52%
General and administrative expenses -9.32 -9.95 -10.87 -10.98 -10.23 -11.05 -11.29 -11.07 -10.94 -11.71 -11.89 -12.15 -11.56 -11.85 -11.52 -13.03 -10.94 -11.72 -11.54 -11.63
Operating income 16.31% 16.20% 16.43% 16.54% 16.49% 17.38% 16.60% 16.61% 12.83% 13.65% 13.52% 12.35% 13.82% 13.36% 15.91% 10.62% 13.08% 12.05% 11.08% 15.89%
Retirement benefits non-service expense -2.22 -2.04 -2.53 -2.69 -3.22 -7.58 -3.59 -3.81 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Interest expense -0.59 -0.60 -0.63 -0.65 -0.63 -0.66 -0.69 -0.75 -0.71 -0.76 -0.81 -0.97 -0.93 -0.96 -0.96 -1.01 -0.92 -1.00 -1.01 -1.10
Interest income 0.15 0.13 0.10 0.19 0.14 0.09 0.12 0.11 0.10 0.06 0.08 0.08 0.06 0.07 0.07 0.07 0.03 0.05 0.03 0.08
Other income (expense), net -0.09 0.23 0.11 0.30 -0.19 0.12 0.05 -0.08 0.07 0.03 -0.56 0.12 -0.02 0.07 0.02 0.03 0.03 -0.16 0.02 0.04
Non-operating income (expense), net -2.74% -2.28% -2.95% -2.85% -3.90% -8.04% -4.12% -4.53% -0.53% -0.67% -1.29% -0.77% -0.88% -0.83% -0.88% -0.90% -0.85% -1.11% -0.96% -0.98%
Income from continuing operations before taxes 13.57% 13.91% 13.48% 13.69% 12.60% 9.34% 12.48% 12.08% 12.30% 12.99% 12.23% 11.58% 12.94% 12.53% 15.03% 9.72% 12.23% 10.95% 10.12% 14.90%
Federal and foreign income taxes -2.36 -2.35 -2.12 -2.17 -1.35 0.07 -0.56 -2.12 -6.59 -3.95 -3.52 -3.30 -4.26 -3.86 -3.35 -2.71 -3.48 -3.27 -1.54 -4.43
Income from continuing operations 11.21% 11.56% 11.36% 11.52% 11.25% 9.42% 11.92% 9.96% 5.71% 9.04% 8.71% 8.28% 8.67% 8.67% 11.68% 7.01% 8.75% 7.68% 8.58% 10.48%
Income (loss) from discontinued operations, net of tax 0.03 -0.01 0.00 0.00 -0.01 0.00 0.02 -0.02 0.00 -0.02 0.00 0.05 0.00 0.02 -0.02 0.02 0.21 -0.02 0.02 0.00
Net income 11.23% 11.55% 11.36% 11.52% 11.24% 9.42% 11.94% 9.94% 5.71% 9.02% 8.71% 8.33% 8.67% 8.69% 11.67% 7.03% 8.96% 7.66% 8.60% 10.48%
Net (income) loss attributable to noncontrolling interests in subsidiaries 0.05 0.00 0.06 0.09 0.07 0.04 0.14 0.16 0.09 0.08 0.10 0.10 0.05 0.08 0.08 0.42 0.06 0.07 0.03 -0.06
Net income attributable to Raytheon Company 11.29% 11.55% 11.41% 11.61% 11.30% 9.46% 12.08% 10.10% 5.79% 9.10% 8.80% 8.43% 8.72% 8.77% 11.75% 7.44% 9.02% 7.73% 8.64% 10.42%

Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-10-01), 10-Q (reporting date: 2017-07-02), 10-Q (reporting date: 2017-04-02), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-27), 10-Q (reporting date: 2015-06-28), 10-Q (reporting date: 2015-03-29).

An analysis of the common-size income statement reveals a consistent revenue mix and evolving profitability margins over the period from March 2015 through December 2019. Revenue streams remain predominantly driven by product sales, which consistently account for between 82% and 85% of net sales, while services provide a stable secondary contribution ranging from 14% to 17%.

Gross Margin Trends
Gross margins exhibited notable volatility, fluctuating between a low of 22.62% in June 2015 and a peak of 28.43% in September 2018. This volatility is primarily attributed to fluctuations in the cost of sales for products, which varied from 58.33% to 64.38% of net sales. Conversely, the cost of sales for services remained relatively stable, generally fluctuating within a narrow band between 11% and 14%.
Operating Efficiency
Operating income showed a general upward trajectory in the latter half of the analyzed period. While operating margins dipped to 10.62% in April 2016, they climbed to a peak of 17.38% by September 2018. This improvement was supported by a gradual reduction in general and administrative expenses, which decreased from a high of 13.03% in April 2016 to 9.32% by December 2019, indicating enhanced operational leverage.
Non-Operating Impact
The non-operating profile shifted significantly starting in 2018. While interest expenses trended downward from 1.10% to 0.59% of net sales, a new substantial drag emerged in the form of retirement benefits non-service expenses. This item introduced significant volatility, peaking at 7.58% of net sales in September 2018, which heavily impacted the non-operating income net totals during that year.
Net Profitability
Net income attributable to the company fluctuated but showed resilience. After a significant dip to 5.79% in December 2017, net profit margins recovered and stabilized between 11% and 12% throughout 2019. This stability was achieved despite the aforementioned retirement benefit expenses, suggesting that gains in operating income and lower interest costs offset non-operating headwinds.

Overall, the financial trajectory indicates a company with a stable revenue base and improving operating efficiency. The transition toward lower administrative costs and reduced interest burdens has provided a buffer against volatile product costs and periodic non-operating charges, resulting in a more stable net profit margin by the end of 2019.

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