By Kristin Jones Raytheon Co.'s (RTN) second-quarter earnings rose 7.5% as the defense company held down costs and widened its profit margin, even as revenue decreased. The company raised its full-year earnings outlook, now seeing per-share earnings of $5.70 to $5.85, from its previously targeted profit of $5.55 to $5.70. Raytheon affirmed its 2012 sales guidance. As U.S. lawmakers continue to wrangle over Pentagon spending, Raytheon and other defense contractors have been expanding into international markets and shifting into new territories like cybersecurity. The company, known as the maker of Patriot missiles, is considered among the most resilient to U.S. cuts, thanks to a diversified business base and limited reliance on big-ticket projects. Raytheon is waiting to see how it fares in the competition to provide Turkey with a missile-defense system, against proposals from Russia, Europe and China. The company reported a profit of $471 million, or $1.41 a share, up from $438 million, or $1.23 a share, a year earlier. Excluding special items, earnings were $1.55, up from $1.37 a year ago. Revenue sank 3.4% to $5.99 billion. Analysts polled by Thomson Reuters recently projected earnings of $1.22 a share, with revenue of $6.03 billion. Gross margin widened to 22.4% from 20.6%, as sales costs decreased. Operating expenses fell 5.1%. Bookings were down 17% to $6.16 billion. Backlog at quarter's end fell to $33.92 billion from $34.48 billion a year ago. Sales of missiles, the largest segment by revenue, fell 1%, while segment operating profit improved 12%. The space and airborne systems segment, which includes Applied Signal Technology Inc., which Raytheon acquired early last year, saw sales rise 2%, while segment operating earnings grew 16%. Shares closed at $55.08 on Wednesday and were inactive premarket. The stock is up 14% so far this year. Write to Kristin Jones at kristin.jones@dowjones.com Subscribe to WSJ: http://online.wsj.com?mod=djnwires
