By Andrea Shalal
WASHINGTON (Reuters) - Raytheon Co (RTN.N) on Thursday said strong international demand for its weapons systems fueled higher-than-expected quarterly earnings and revenues, prompting the company to raise its 2015 revenue target and sending its shares sharply higher.
Raytheon, maker of the Patriot missile system, reported net earnings of $504 million from continuing operations, or $1.65 per share, up from $499 million and $1.59 per share a year earlier. Revenues rose 3 percent to $5.8 billion.
Analysts polled by Thomson Reuters I/B/E/S had forecast earnings of $488 million or $1.62 per share and revenues of $5.48 billion.
The company said its $1.9 billion acquisition of Websense, a cybersecurity firm, was going better than expected and the unit should be accretive to earnings in two to three years, instead of three to four years as initially expected.
Chief Executive Tom Kennedy told analysts the company saw strong demand for cybersecurity given continuing attacks on private and federal computer networks, as well as growing international demand for the company's weapons systems.
He said international orders accounted for a record 44 percent of the company's backlog at the end of the second quarter, something he called a "monumental" achievement. That compared to 38 percent a year earlier.
Kennedy said he was optimistic that U.S. lawmakers would agree to some measure to ease mandatory budget caps slated to resume in fiscal 2016, which could help domestic revenues return to growth late next year or early in 2017.
"Both on the domestic and international (sides), we see a significant pipeline that will take us well beyond 2020," he said on a quarterly earnings call.
Raytheon shares were trading $7.54, or 7.8 percent higher, at $104.53 around mid-morning on the New York Stock Exchange.
Raytheon said it now expected $22.7 billion to $23.2 billion in revenues for the full year, up from its earlier forecast of $22.3 billion to $22.8 billion.
The company lowered its outlook for earnings per share to a range of $6.47 to $6.62, from $6.67 to $6.82, to reflect about $0.25 in dilutive effect from the Websense acquisition, but the impact was about half of what the company initially projected.
Excluding the acquisition, the company now expected earnings per share to rise about $0.05, Chief Financial Officer Toby O'Brien told Reuters.
The company said it had approved $250 million in additional share repurchases for the year, which would bring the total for the year to around $1 billion, $250 million more than in 2014.
O'Brien said the company remained upbeat about the Websense acquisition despite Lockheed Martin Corp's (LMT.N) announcement this week that it may sell or spin off its commercial cyber unit and other services businesses.
Acquiring the firm gave Raytheon the scale it needed to play a significant role in the growing commercial market, he said.
O'Brien declined to comment directly on Lockheed's strategic review, or the company's interest in potentially acquiring any of its services or commercial cyber businesses.
Raytheon said international orders would likely slow in the second half.
(Reporting by Andrea Shalal; Editing by Nick Zieminski and Christian Plumb)