Raytheon Sells Airplane Unit for $3.3 B

Elena
21 Dec, 2006
New York City

The company expects proceeds of $2.5 billion after tax. It also considers a buyback of $750 million in stock. Raytheon plans to retire $1 billion in debt and report the aircraft unit as a discontinued operation. It sees earning in the range of $2.35 to $2.45 a share from continuing operations in 2006 on sales between $20 billion and $20.5 billion.

[R]8:00AM Raytheon agreed to sell aircraft-making unit to Goldman Sachs Capital Partners for $3.3 B.[/R]
Raytheon Co. ((RTN)) confirmed it had agreed to sell its aircraft-making unit to Goldman Sachs Capital Partners ((GS)) and Onex Partners in a deal worth $3.3 billion. Raytheon is an industry leader in defense and government electronics, space, information technology, technical services, and business and special mission aircraft. The company expects proceeds of $2.5 billion after tax. It also considers a buyback of $750 million in stock. Raytheon plans to retire $1 billion in debt and report the aircraft unit as a discontinued operation.

It sees earning in the range of $2.35 to $2.45 a share from continuing operations in 2006 on sales between $20 billion and $20.5 billion, and $2.75 to $2.90 a share on revenue between $21.3 billion and $21.8 billion in 2007. It earlier projected 2006 earnings from continuing operations between $2.70 and $2.80 on sales between $23.1 billion to $23.6 billion, and earning $2.95 to $3.05 a share from continuing operations on revenue of $24.6 billion to $25.1 billion in 2007.


[R]7:30AM Asian markets in broad decline Thursday, despite the advance in Japan.[/R]
Asian markets fell broadly on Thursday. The Nikkei 225 stock index in Japan gained 0.22% to end at 17,047.83, its highest finish since May 9. Steelmakers advanced on reports that Nippon Steel was about to gain control of Usiminas of Brazil by acquiring a majority stake. Nippon Steel edged 0.5% higher and Kobe Steel added 0.51%.

Toyota Motor Corp advanced 1.7% while Honda rose 1.1%. Electronics and entertainment conglomerate Sony moved 0.2% up. Machinery-related shares advanced as well, boosted by hopes of strong capital expenditure on new factory investment. Komatsu Ltd. Gained 3.4% and industrial robot-maker Fanuc Ltd gained 1.3%.

In Hong Kong, the Hang Seng Index shed 0.1% to 19,222.84. Bank of China gained 1.6% and China Construction Bank also moved up 2.2%, but falls in HSBC and China Mobile weighed on the overall market. HSBC shed 0.3% and China Mobile slipped 0.3%.

Thursday, the Stock Exchange of Thailand benchmark SET index shed 2% to 676, with investors attributing the decline to profit-taking and concerns over a weaker Thai baht against the U.S. dollar that could trigger a sell-off.

South Korean stocks also closed slightly lower on profit-taking in banking and telecommunications shares. The Korea Composite Stock Price Index, or Kospi, dropped 0.4% to 1436.47. Kookmin Bank was off 1.1% and Shinhan Financial Group lost 2.3%.

Malaysia KLSE Composite rose 0.2%. Singapore Straits Times Index added 0.3% and Taiwan Weighted Price index put up 0.4%. Other markets around the region included Australia S&P/ASX 200 shedding 0.3% and New Zealand NZX-50 moving 0.5% higher.


[R]6:30AM European stocks retreated slightly Thursday in thin trading.[/R]
European markets declined slightly in early trade on Thursday. The FTSE 100 in London was 0.1% lower at 6,188.9, Frankfurt Xetra Dax was down 0.1% at 6,582.24, while the CAC 40 in Paris was up fractionally at 5,516.44.

Advancers

Publicis Groupe, the French advertising company, advanced 4.7% following its announcement after the close on Wednesday that it was buying Digitas, the US interactive advertising agency, valuing the company at $1.3 billion.

French utility Suez traded 2% higher as it said its Belgian subsidiary Electrabel had increased its stake in Societe Hydro-Electrique du Midi in france from 40% to 99.6%.

Richemont, luxury goods group, gained after Swiss watch exports rose 13% yearly in November. Richemont moved up 3%.

Ryanair Holdings advanced 0.3% after it said that it is withdrawing its offer to buy Aer Lingus as the European Commission competition body announced it would open an investigation into the takeover bid. Aer Lingus shares gave up 0.4%.

Decliners

Vodafone Group shares dipped 1.4% on reports that of tabling a bid for Hutchison Essar at $13.5 billion. Shares in Sanofi-Aventis slipped 0.2% after its CEO told the a newspaper that the company would like to buy a biotech if one was available.

Oil and gold

Crude oil declined from a three-month high on talks that warmer-than-usual weather will reduce demand for heating fuel amid rising inventories. Crude oil for February delivery fell 56 cents, or 0.9%, to $63.16 in electronic trading on the New York Mercantile Exchange. Brent crude oil for February settlement fell as much as 62 cents to $62.61 a barrel in electronic trading on the ICE Futures exchange.

Gold gained in London as the dollar retreated against the euro, making some investors buy the metal as an alternative investment. Gold for immediate delivery in London rose $2.11, or 0.3%, to $622.55 an ounce.

Currencies

The U.S. dollar was mixed against other major currencies in European trading Thursday morning. The euro traded at $1.3172, down from $1.3178 late Wednesday. The British pound traded at $1.9682, up from $1.9644. The dollar bought 118.15 Japanese yen, down from 118.34.