Raytheon released its third quarter 2014 financial results and conducted a conference call with financial analysts and investors. This is the transcript.
Executives
– Todd B. Ernst – Former Vice President of Investor Relations
– Thomas A. Kennedy – Chairman and Chief Executive Officer
– David C. Wajsgras – Chief Financial Officer and Senior Vice President
Operator
Good day, ladies and gentlemen, and welcome to the Raytheon Third Quarter 2014 Earnings Conference Call. My name is Glenn, and I’ll be your event manager for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes.
I would now like to turn the conference over to your host for today, Mr. Todd Ernst, Vice President of Investor Relations. Please proceed.
Todd B. Ernst – Former Vice President of Investor Relations
Thank you, Glenn. Good morning, everyone. Thank you for joining us today on our third quarter conference call. The results that we announced this morning, the audio feed of this call and the slides that we’ll reference are available on our website on raytheon.com.
Following this morning’s call, an archive of both the audio replay and a printable version of the slides will be available in the Investor Relations section of the website.
With me today are Tom Kennedy, our Chairman and Chief Executive Officer; and Dave Wajsgras, our Chief Financial Officer. We’ll start with some brief remarks by Tom and Dave, and then we’ll move on to questions.
Before I turn the call over to Tom, I’d like to caution you regarding our forward-looking statements. Any matters discussed today that are not historical facts, particularly comments regarding the company’s future plans, objectives and expected performance, constitute forward-looking statements. These statements are based on a wide range of assumptions that the company believes are reasonable but are subject to a range of uncertainties and risks that are summarized at the end of our earnings release and are discussed in detail in our SEC filings.
With that, I’ll turn the call over to Tom. Tom?
Thomas A. Kennedy – Chairman and Chief Executive Officer
Thank you, Todd. Good morning, everyone. This morning, Raytheon reported solid quarter results, driven by strong operational performance across the company. Notably, our margins in the third quarter improved over last quarter due to solid program execution, and our book-to-bill ratio in the quarter was 1.07 as a result of global customer demand for our diverse range of solutions.
Raytheon’s broad and deep portfolio of advanced systems continues to be a key strength for the company. Overall, we performed well in the third quarter and continue to position the company for long-term growth.
In the quarter, domestic bookings were solid and drove a book-to-bill ratio of 1.15. Demand in the third quarter came from across our domestic portfolio, including significant bookings from the FAA and other civil customers in addition to core defense. I would note that this is the second consecutive quarter with domestic book-to-bill ratio above 1.
Turning now to the international market. The shifting geopolitical landscape and the evolving global threat environment are driving demand for our advanced solutions. And as we mentioned on the last call, Qatar signed an LOA for $2 billion Patriot integrated air and missile defense system with the U.S. government in early July. Since this is an FMS deal, the next step is for us to get a contract with the U.S. government. We are currently working through the process to finalize our agreement with the U.S. Army, and we expect to book an order before year-end.
Another international booking opportunity we see in the fourth quarter is also for Patriot System. This is a $2 billion opportunity for 6 fire units. As we mentioned on the last call, we expect to book this before year-end.
