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Raytheon Technologies (RTX) Down 5.3% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Raytheon Technologies (RTX - Free Report) . Shares have lost about 5.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Raytheon Technologies due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Raytheon Technologies’ first-quarter 2022 adjusted earnings per share (EPS) of $1.15 beat the Zacks Consensus Estimate of $1.01 by 13.9%. Moreover, the bottom-line figure improved 27.8% from the year-ago quarter’s adjusted earnings of 90 cents.
Including one-time items, the company reported GAAP earnings of 74 cents compared with 51 cents per share recorded in the year-ago quarter.
The year-over-year improvement in the bottom line was attributable to higher year-over-year sales as well as operating profit generated in the reported quarter.
Operational Performance
Raytheon Technologies’ first-quarter sales of $15,716 million missed the Zacks Consensus Estimate of $15,799 million by 0.5%. The sales figure, however, rose 3% from $15,251 million recorded in the year-ago quarter.
Total costs and expenses increased 2.2% year over year to $14,664 million. The company generated an operating profit of $1,080 million compared with $1,013 million in the year-ago quarter.
Segmental Performance
Collins Aerospace: Sales at this segment improved 10% year over year to $4,824 million in first-quarter 2022 driven by higher commercial aftermarket as well as commercial OEM sales.
Its adjusted operating income came in at $584 million compared with the year-ago quarter’s level of $332 million.
Pratt & Whitney: Sales at this segment rose 12% year over year to $4,529 million, driven by growth in the commercial aftermarket as well as commercial OEM businesses.
Its adjusted operating profit was $308 million compared with the year-ago quarter’s operating profit of $40 million.
Raytheon Intelligence & Space: This segment recorded first-quarter sales of $3,572 million, down 5% year over year. Its operating profit was $378 million, marking a decline of 3%.
Raytheon Missiles & Defense: This unit recorded sales of $3,527 million, down 7% year over year. The unit recorded $387 million of operating profit in the first quarter, down 22%.
Financial Update
Raytheon Technologies had cash and cash equivalents of $6,040 million as of Mar 31, 2022, compared with $7,832 million as of Dec 31, 2021.
Long-term debt was $31,308 million, as of Mar 31, 2022, down from $31,327 million as of Dec 31, 2021.
Net cash inflow from operating activities amounted to $476 million during the first quarter compared with $723 million in first-quarter 2021.
Its free cash flow was $37 million at the end of first-quarter 2022 compared with $336 million at the end of first-quarter 2021.
Guidance
Raytheon Technologies updated its financial guidance for 2022.
The company still projects adjusted EPS in the range of $4.60-$4.80. The Zacks Consensus Estimate for Raytheon’s 2022 EPS, pegged at $4.79, lies near the higher end of the company’s guided range.
The company currently expects to record revenues in the range of $67.75-$68.75 billion, down from the prior guidance of $68.5-$69.5 billion. The Zacks Consensus Estimate for revenues, pegged at $68.78 billion, lies above the company’s new guidance.
The company continues to expect to generate free cash flow worth approximately $6 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, Raytheon Technologies has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Raytheon Technologies has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Raytheon Technologies (RTX) Down 5.3% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Raytheon Technologies (RTX - Free Report) . Shares have lost about 5.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Raytheon Technologies due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Raytheon Technologies Q1 Earnings Top, Sales View Cut
Raytheon Technologies’ first-quarter 2022 adjusted earnings per share (EPS) of $1.15 beat the Zacks Consensus Estimate of $1.01 by 13.9%. Moreover, the bottom-line figure improved 27.8% from the year-ago quarter’s adjusted earnings of 90 cents.
Including one-time items, the company reported GAAP earnings of 74 cents compared with 51 cents per share recorded in the year-ago quarter.
The year-over-year improvement in the bottom line was attributable to higher year-over-year sales as well as operating profit generated in the reported quarter.
Operational Performance
Raytheon Technologies’ first-quarter sales of $15,716 million missed the Zacks Consensus Estimate of $15,799 million by 0.5%. The sales figure, however, rose 3% from $15,251 million recorded in the year-ago quarter.
Total costs and expenses increased 2.2% year over year to $14,664 million. The company generated an operating profit of $1,080 million compared with $1,013 million in the year-ago quarter.
Segmental Performance
Collins Aerospace: Sales at this segment improved 10% year over year to $4,824 million in first-quarter 2022 driven by higher commercial aftermarket as well as commercial OEM sales.
Its adjusted operating income came in at $584 million compared with the year-ago quarter’s level of $332 million.
Pratt & Whitney: Sales at this segment rose 12% year over year to $4,529 million, driven by growth in the commercial aftermarket as well as commercial OEM businesses.
Its adjusted operating profit was $308 million compared with the year-ago quarter’s operating profit of $40 million.
Raytheon Intelligence & Space: This segment recorded first-quarter sales of $3,572 million, down 5% year over year. Its operating profit was $378 million, marking a decline of 3%.
Raytheon Missiles & Defense: This unit recorded sales of $3,527 million, down 7% year over year. The unit recorded $387 million of operating profit in the first quarter, down 22%.
Financial Update
Raytheon Technologies had cash and cash equivalents of $6,040 million as of Mar 31, 2022, compared with $7,832 million as of Dec 31, 2021.
Long-term debt was $31,308 million, as of Mar 31, 2022, down from $31,327 million as of Dec 31, 2021.
Net cash inflow from operating activities amounted to $476 million during the first quarter compared with $723 million in first-quarter 2021.
Its free cash flow was $37 million at the end of first-quarter 2022 compared with $336 million at the end of first-quarter 2021.
Guidance
Raytheon Technologies updated its financial guidance for 2022.
The company still projects adjusted EPS in the range of $4.60-$4.80. The Zacks Consensus Estimate for Raytheon’s 2022 EPS, pegged at $4.79, lies near the higher end of the company’s guided range.
The company currently expects to record revenues in the range of $67.75-$68.75 billion, down from the prior guidance of $68.5-$69.5 billion. The Zacks Consensus Estimate for revenues, pegged at $68.78 billion, lies above the company’s new guidance.
The company continues to expect to generate free cash flow worth approximately $6 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, Raytheon Technologies has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Raytheon Technologies has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.