Name: Raytheon Co. (NYSE:RTN) | Income Statement
Creator: Stock Analysis on Net

Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

Raytheon Co., consolidated income statement

US$ in millions

12 months ended:	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Products	24,435)	22,633)	21,416)	20,166)	19,443)
Services	4,741)	4,425)	3,932)	3,903)	3,804)
Net sales	29,176)	27,058)	25,348)	24,069)	23,247)
Cost of sales, products	(17,747)	(16,108)	(15,872)	(14,767)	(14,447)
Cost of sales, services	(3,666)	(3,465)	(3,204)	(3,180)	(3,127)
Cost of sales, products and services	(21,413)	(19,573)	(19,076)	(17,947)	(17,574)
Gross margin	7,763)	7,485)	6,272)	6,122)	5,673)
General and administrative expenses	(2,989)	(2,947)	(2,954)	(2,882)	(2,660)
Operating income	4,774)	4,538)	3,318)	3,240)	3,013)
Retirement benefits non-service expense	(688)	(1,230)	—)	—)	—)
Interest expense	(180)	(184)	(205)	(232)	(233)
Interest income	42)	31)	21)	16)	11)
Other income (expense), net	38)	(8)	(21)	6)	(4)
Non-operating income (expense), net	(788)	(1,391)	(205)	(210)	(226)
Income from continuing operations before taxes	3,986)	3,147)	3,113)	3,030)	2,787)
Federal and foreign income taxes	(658)	(264)	(1,114)	(857)	(733)
Income from continuing operations	3,328)	2,883)	1,999)	2,173)	2,054)
Income (loss) from discontinued operations, net of tax	1)	(1)	2)	1)	13)
Net income	3,329)	2,882)	2,001)	2,174)	2,067)
Net loss attributable to noncontrolling interests in subsidiaries	14)	27)	23)	37)	7)
Net income attributable to Raytheon Company	3,343)	2,909)	2,024)	2,211)	2,074)

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

Net sales exhibited a consistent upward trajectory over the five-year period, increasing from $23,247 million in 2015 to $29,176 million in 2019. This growth was driven by expansions in both primary revenue streams: product sales rose from $19,443 million to $24,435 million, while service sales grew from $3,804 million to $4,741 million. The combined effect resulted in a compound growth pattern that strengthened the top-line performance annually.

Gross Profitability and Margin Expansion: Gross margin grew from $5,673 million in 2015 to $7,763 million in 2019. The gross margin percentage improved from approximately 24.4% in 2015 to 26.6% by 2019, indicating enhanced cost control relative to revenue growth or a shift toward higher-margin product and service mixes.
Operating Efficiency and Leverage: Operating income increased from $3,013 million in 2015 to $4,774 million in 2019. This growth was supported by disciplined management of general and administrative expenses, which remained relatively flat, moving from $2,660 million in 2015 to $2,989 million in 2019. The disparity between the growth in operating income and the stability of overhead expenses suggests a high degree of operating leverage.
Non-Operating Expenses and Volatility: The period was marked by significant volatility in non-operating items, specifically due to retirement benefits non-service expenses, which impacted the results in 2018 ($1,230 million) and 2019 ($688 million). Conversely, interest expenses showed a steady decline from $233 million in 2015 to $180 million in 2019, which helped mitigate some of the non-operating pressures.
Net Income Performance: Net income attributable to the company rose from $2,074 million in 2015 to $3,343 million in 2019. Although a slight contraction occurred in 2017, the subsequent recovery in 2018 and 2019 demonstrates an ability to scale bottom-line profits despite the aforementioned non-operating charges and fluctuating tax provisions.

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