Raytheon Outlines Strategy for Regaining Fiscal Momentum

NEW YORK —  Raytheon Co. plans to sell $500 million of businesses this year as it moves to cut debt and focus on more profitable units, the defense company told analysts and investors at a conference in New York.

The company also said it expects revenue to rise an average of 4% to 6% annually from 2000 to 2004 and earnings to rise 10% to 15% in the same period.

Raytheon said it expects revenue to rise 1.5% this year to $20.3 billion and net income to rise to $580 million. The company also expects to reduce debt to $9 billion from $9.5 billion.

Raytheon is concentrating on its main businesses after warning in October that sales and profit last year and this year will be less than forecast, triggering its biggest stock drop in at least two decades. The shares have fallen about 61% in the last 12 months. “The single most important thing for Raytheon this year is addressing the operational and control issues that surfaced in 1999,” Chief Financial Officer Franklyn Caine said. “We understand the depths of those problems.”

Last month, the company agreed to sell its flight-simulation and training division to L-3 Communications Holdings Inc. for $160 million. In November, Raytheon said it would sell a slumping microelectronics unit to closely held Imrex.

Raytheon has about $700 million of contracts it receives zero margin on, the company said. Raytheon is focusing on its main businesses, which include defense electronics, missile systems and air defense systems such as the Patriot missile, and its aircraft production and integration business.

Raytheon plans to add about 6,000 employees this year, the company said at the meeting.

The Class B shares of Lexington, Mass.-based Raytheon fell 6 cents to $21.56 on the New York Stock Exchange.