Raytheon Company (NYSE: RTN) today announced net sales for the second quarter 2016 of $6.0 billion, up 3 percent compared to $5.8 billion in the second quarter 2015.

Second quarter 2016 EPS from continuing operations was $2.38 compared to $1.65 in the second quarter 2015. Second quarter 2016 EPS from continuing operations included a tax-free gain of $0.53 related to the ThalesRaytheonSystems (TRS) transaction, discussed further below, which had been previously forecast in the third quarter of 2016. In addition, as expected, second quarter 2016 included a tax benefit of $0.10 from the new accounting standard for stock compensation, previously adopted in the first quarter of 2016. Second quarter 2015 EPS from continuing operations included a $0.29 favorable impact from a tax settlement. Second quarter 2016 EPS from continuing operations included a favorable FAS/CAS Adjustment of $0.24 compared to a favorable FAS/CAS Adjustment of $0.10 in the second quarter 2015.

"The Company had strong second quarter operating results, with bookings, sales, operating margin, earnings per share, and cash flow all ahead of our expectations," said Thomas A. Kennedy, Raytheon Chairman and CEO. "We begin the second half of 2016 with continued confidence in our growth outlook, and we have increased our guidance for earnings and cash flow as a result of our strong year-to-date performance."

Operating cash flow from continuing operations for the second quarter 2016 was $746 million compared to$376 million for the second quarter 2015. The increase in operating cash flow from continuing operations in the second quarter 2016 was primarily due to the timing of payments and cash taxes, as well as lower required pension contributions. The second quarter 2015 included the collection of $226 million from the eBorders settlement.

The Company had bookings of $7.1 billion in the second quarter 2016, resulting in a book-to-bill ratio of 1.18 in the quarter. Second quarter 2015 bookings were $7.6 billion. Year-to-date 2016 bookings were $13.3 billion, resulting in a book-to-bill ratio of 1.13. Year-to-date 2015 bookings were $12.1 billion.

In the second quarter 2016, the Company repurchased 1.6 million shares of common stock for $202 million. Year-to-date 2016, the Company repurchased 4.8 million shares of common stock for $602 million.

As previously announced, on June 29, 2016 the Company and Thales concluded the transaction to transition the stakeholder positions each company held in the TRS joint venture structure – with Raytheon acquiring 100 percent of the TRS U.S. operations and Thales acquiring 100 percent of the French operations. As a result of the transaction, Raytheon made a net cash payment to Thales in the amount of $90 million and recorded a tax-free gain of $158 million or $0.53 per diluted share in its second quarter financial results.

Integrated Defense Systems (IDS) had second quarter 2016 net sales of $1,399 million compared to $1,565 million in the second quarter 2015. The change in net sales for the quarter was primarily driven by the recognition of previously deferred precontract costs on an international Patriot program in the second quarter 2015.

IDS recorded $375 million of operating income in the second quarter 2016 compared to $202 million in the second quarter 2015. The increase in operating income for the quarter was primarily driven by the TRS transaction discussed earlier, which resulted in a $158 million tax-free gain in the second quarter 2016. In addition, second quarter 2015 included a $33 million unfavorable impact related to the Air Warfare Destroyer (AWD) program.

During the quarter, IDS booked $487 million to provide advanced Patriot air and missile defense capabilities for Kuwait. IDS also booked $354 million on the Aegis weapon system for the U.S. Navy and international customers and $117 million for in-service support for the Collins class submarine for the Royal Australian Navy.

About Raytheon

Raytheon Company, with 2015 sales of $23 billion and 61,000 employees, is a technology and innovation leader specializing in defense, civil government and cybersecurity solutions. With a history of innovation spanning 94 years, Raytheon provides state-of-the-art electronics, mission systems integration, C5ITM products and services, sensing, effects, and mission support for customers in more than 80 countries. Raytheon is headquartered in Waltham, Massachusetts. Follow us on Twitter.