Raytheon Company develops technologically integrated products, services, and solutions worldwide. It operates through five segments: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); Space and Airborne Systems (SAS); and Forcepoint. The IDS segment provides integrated air and missile defense; land and sea-based radar solutions; command, control, communications, computers, cyber, and intelligence solutions; and naval combat and ship electronic systems. The IIS segment offers a range of technical and professional services, such as intelligence, surveillance and reconnaissance, navigation, DoD space and weather, cybersecurity, analytics, training, logistics, mission support, engineering, and automation and sustainment solutions; and air traffic management systems. The MS segment develops and supports a range of weapon systems, including missiles, smart munitions, close-in weapon systems, projectiles, kinetic kill vehicles, directed energy effectors, and combat sensor solutions. The SAS segment provides electro-optical/infrared sensors, airborne radars for surveillance and fire control applications, lasers, precision guidance systems, signals intelligence systems, processors, electronic warfare systems, and communication and space-qualified systems for civil and military applications. The Forcepoint segment develops cyber security products comprising insider threat solutions, data loss prevention, firewall technology, cross domain transfer, and cloud and on premise Web and email security products. The company serves the U.S. Department of Defense, the U.S. Intelligence Community, the U.S. Armed Forces, the Federal Aviation Administration, the National Oceanic and Atmospheric Administration, Department of Homeland Security, the National Aeronautics and Space Administration, and other international customers. Raytheon Company was founded in 1922 and is based in Waltham, Massachusetts.
Business Analysis of Raytheon
The Aerospace and Defense Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Raytheon compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Raytheon to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Raytheon with an interactive chart.
- Revenue Growth: Raytheon reported a revenue growth of 3.5% year-on-year during 2016. Aerospace Products, Parts, Systems and Services Industry grew at 0.8% in the same period
- COGS share of Revenues: As a percentage of revenue, Raytheon spent 74.6% of its total revenues on COGS. Aerospace Products, Parts, Systems and Services industry average (COGS share of revenue) in the same period was 78.4%
- R&D share of Revenues: Raytheon R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, Raytheon spent 12.0% of its total revenues on Sales, Marketing, and General Administration (SG&A). Aerospace Products, Parts, Systems and Services industry average SG&A spending in the same period was 8.3%
- Inventory share of Revenues: As a percentage of revenue, Raytheon spent 2.7% of its total revenues on Inventories. Aerospace Products, Parts, Systems and Services industry average Inventory spending in the same period was 25.0%
- Accounts Payable share of Revenues: As a percentage of revenue, Raytheon invested 6.3% of its total revenues on Accounts Payable (A/P) Aerospace Products, Parts, Systems and Services industry average Accounts Payable investment in the same period was 10.1%
- Accounts Receivable share of Revenues: As a percentage of revenue, Raytheon invested 25.8% of its total revenues on Accounts Receivable (A/R). Aerospace Products, Parts, Systems and Services industry average Accounts Receivable investment in the same period was 18.0%
- PP&E share of Revenues: As a percentage of revenue, Raytheon invested 9.0% of its total revenues on Property, Plants, and Equipments (PP&E). Aerospace Products, Parts, Systems and Services industry average PPE investment in the same period was 15.2%
- Intangibles share of Revenues: As a percentage of revenue, Raytheon invested 61.4% of its total revenues on Intangibles. Aerospace Products, Parts, Systems and Services industry average Intangibles investment in the same period was 39.7%
- Net Margins: Raytheon Net Margins in the year 2016 were 9.2%. Aerospace Products, Parts, Systems and Services industry average Net Margins in the same period were 7.2%
Sector and Industry Association of Raytheon
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries. For high-level analysis purposes, related/similar sectors are grouped into sector groups.
Raytheon is associated with Industrials Sector Group, Aerospace and Defense Sector, and Aerospace Products, Parts, Systems and Services Industry.
Aerospace and Defense sector is comprised of the following industries: Aerospace Products, Parts, Systems and Services; Military and Defense. The definitions for each of the industries is as follows:
- Aerospace Products, Parts, Systems and Services industry includes manufacturers, assemblers, distributors and service providers of aerospace and aircraft parts primarily used in the commercial or private air transport.
- Military and Defense industry includes producers of components and equipment for the defense industry, including military aircraft, radar equipment and weapons, drones, space and security systems. Military and Defense companies also offer military shipbuilding, submarines, amphibious assault ships and nuclear services. Arms and weapon companies offering consumer firearms are included in the specialized consumer goods.
Industry Ranking of Raytheon
With $24.1 billion revenues, Raytheon ranked number 5 of all the companies in the US Aerospace Products, Parts, Systems and Services industry. There were a total of 32 public companies in the US Aerospace Products, Parts, Systems and Services industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Aerospace Products, Parts, Systems and Services industry by revenues during 2016 were:
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.