Northrop, Raytheon see international growth

Weapon makers Northrop Grumman Corp. and Raytheon Co. said Thursday they expect revenue from international markets to rise this year as U.S. military spending declines.

Northrop CEO Wesley Bush said he expects his company's international sales to rise to nearly 13 percent of total revenue this year, up from 10 percent of total revenue in 2013. Bush made his comments during a conference call with analysts after Northrop released fourth-quarter results Thursday.

Raytheon Chief Financial Officer David Wajsgras said that he expects the company's domestic business to be down in the "mid-single digit range" in 2014 and for the international business to be up in the "low-to-mid single digit range."

William Swanson, Raytheon's CEO, said the company added two new customers in the Middle East — Oman and Qatar — and that business in Asia is strong. He said he also expects growth from European countries in the next two or three years. "They haven't spent money," said Swanson during a conference call with analysts Thursday after posting fourth-quarter results. "In my opinion, they're going to have to upgrade what they have and we see that as an opportunity."

Northrop said fourth-quarter net income fell to $478 million, or $2.12 per share, from $533 million, or $2.14 per share, in the same quarter a year before. Revenue fell 5 percent to $6.16 billion from $6.48 billion. Its adjusted earnings in the latest quarter amounted to $2 a share. Analysts expected adjusted earnings of $1.94 per share and revenue of $6 billion, according to FactSet.

For the full year, Northrop posted earnings of $8.35 per share and revenue of $24.66 billion.

For 2014, the company expects earnings between $8.70 per share and $9 per share and revenue between $23.5 billion to $23.8 billion, beating Wall Street expectations.

Raytheon said fourth-quarter net income rose to $531 million, or $1.66 per share, from $469 million, or $1.42 per share in the same quarter a year ago. Adjusted to remove one-time items, the company reported earnings of $1.58 per share. That's above the $1.34 per share analysts expected.

Revenue fell 9 percent to $5.87 billion from $6.44 billion. Analysts expected revenue of $5.95 billion.

For the full year, Raytheon reported adjusted earnings of $6.38 per share and revenue of $23.71 billion.

For 2014, the company expects adjusted earnings between $5.76 per share and $5.91 per share and revenue between $22.5 billion and $23 billion. Analysts expect earnings of $6.31 per share and revenue of $23.08 billion.

Shares of Falls Church, Va.-based Northrop rose $1.12, or 1 percent, to $113.25. Shares of Waltham, Mass.-based Raytheon rose $3.26, or 4 percent, to $91.89.