The defense company reported first-quarter earnings Thursday of $448 million, or $1.33 a share, up from year-earlier earnings of $384 million, or $1.06.Analysts, on average, expected earnings of $1.16 a share. "The earnings beat can primarily be attributed to operational performance with operating margins of 11.9%, up 214bps Y/Y (vs. BofAMLe of 11.0%) despite revenues of $5,938mn, down 2% Y/Y (vs. BofAMLe of $5,883mn)," Bank of America Merrill Lynch analysts wrote in a report Thursday. "Management's 2012 EPS guidance from continuing operations increased to $5.00-$5.15, from $4.90-$5.05. Adjusting for FAS/CAS expense, 2012 EPS guidance increased to $5.55-5.70, from $5.45-5.60. Our 2012 estimate of $5.25 is above the Street's estimate of $5.05. We may review our model after this morning's earnings conference call." Shares of Raytheon hit a 52-week high Thursday of $54.62. The stock's 52-week low of $38.35 was set on Sept. 22. Raytheon's forward P/E is 9.66; the average for defense companies is 11.83. For comparison, Lockeed Martin (LMT) has a higher forward P/E of 10.88. Eleven of the 21 analysts who cover Raytheon rated it hold. Nine analysts gave the stock a buy rating and one rated it sell. TheStreet Ratings gives Raytheon an A- grade with a buy rating and $60.67 price target. The stock has risen 11.74% year to date.
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