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Raytheon Technologies Corporation’s (RTX - Free Report) second-quarter 2023 adjusted earnings per share (EPS) of $1.29 beat the Zacks Consensus Estimate of $1.17 by 10.3%. The bottom line also improved 11% from the year-ago quarter’s level of $1.16.
Including one-time items, the company reported GAAP earnings of 90 cents per share compared with 88 cents in the prior-year quarter.
Operational Performance
Raytheon Technologies’ second-quarter sales of $18,315 million beat the Zacks Consensus Estimate of $17,543 million by 4.4%. The figure also rose 12.3% from $16,314 million recorded in the year-ago period.
Total costs and expenses increased 12.7% year over year to $16,882 million. The company generated an operating profit of $1,458 million compared with $1,353 million in the prior-year quarter.
Raytheon Technologies Corporation Price, Consensus and EPS Surprise
Collins Aerospace: Sales at this segment improved 17% year over year to $5,850 million. This improvement can be attributed to higher commercial aftermarket and commercial OEM sales, backed by strong demand across commercial aerospace end markets. Also, an increase in military sales buoyed by higher development volume boosted this segment’s top line.
Its adjusted operating income totaled $837 million compared with the year-ago quarter’s level of $617 million.
Pratt & Whitney: This segment’s sales rose 15% year over year to $5,701 million. The improvement was due to growth in the commercial aftermarket and commercial OEM businesses, backed by higher shop visit volume and content, as well as higher engine deliveries and favorable mix across both Large Commercial Engines and Pratt & Whitney Canada units.
Adjusted operating profit amounted to $436 million compared with the year-ago quarter’s level of $303 million. This was driven by drop through on higher commercial aftermarket sales and favorable large commercial OEM mix.
Raytheon Intelligence & Space: This segment recorded second-quarter sales of $3,655 million, up 2% year over year, driven by higher sales from Sensing and Effects and Cyber and Services programs.
Its adjusted operating profit totaled $297 million, down 6% from $315 million generated in the corresponding period of 2022.
Raytheon Missiles & Defense: The unit recorded sales of $4,000 million, up 12% year over year. This was driven by higher sales volume from Air Power, Advanced Technology and Land Warfare & Air Defense programs.
The segment recorded an adjusted operating profit of $427 million, up 23% from that reported in the year-ago period.
Financial Update
Raytheon Technologies had cash and cash equivalents of $5,391 million as of Jun 30, 2023, compared with $6,220 million as of Dec 31, 2022.
Long-term debt was $32,723 million as of Jun 30, 2023, up from $30,694 million as of Dec 31, 2022.
Net cash outflow from operating activities amounted to $144 million as of Jun 30, 2023, against net cash inflow worth $1,762 million at the end of second-quarter 2022.
Its free cash outflow was $1,190 million at the end of the reported quarter against free cash inflow of $844 million at the end of second-quarter 2022.
Guidance
Raytheon Technologies has updated its financial guidance for 2023.
The company still projects adjusted EPS in the band of $4.95-$5.05, up from the earlier projected range of $4.90-$5.05. The Zacks Consensus Estimate for RTX’s 2023 EPS is pegged at $5.01, which lies above the midpoint of the company’s guided range.
Raytheon Technologies also raised its revenues guidance to the band of $73-$74 billion, up from the previously projected $72-$73 million. The Zacks Consensus Estimate for revenues is pegged at $72.20 billion, which lies below the mid-point of the company’s guidance.
RTX now expects to generate free cash flow of $4.3 billion, down from the earlier projected $4.8 billion.
Zacks Rank
Raytheon Technologies currently has a Zacks Rank #4 (Sell).
Lockheed Martin Corporation (LMT - Free Report) reported second-quarter 2023 adjusted earnings of $6.73 per share, which surpassed the Zacks Consensus Estimate of $6.43 by 4.7%. The bottom line also improved 6.5% from the year-ago quarter's figure.
Net sales amounted to $16.69 billion, which surpassed the Zacks Consensus Estimate of $15.86 billion by 5.3%. The top line rose 8.1% from $15.45 billion in the year-ago quarter.
Hexcel Corporation (HXL - Free Report) reported second-quarter 2023 adjusted earnings of 50 cents per share, which beat the Zacks Consensus Estimate of 48 cents by 4.2%. The bottom line improved 51.5% from the year-ago quarter’s level of 33 cents.
Net sales totaled $454 million, which beat the Zacks Consensus Estimate of $445 million by 2.2%. Also, the top line witnessed an improvement of 15.6% from the year-ago quarter’s $393 million.
Upcoming Q2 Defense Earnings
Textron Inc. (TXT - Free Report) is scheduled to report second-quarter 2023 results on Jul 27, before market open. The Zacks Consensus Estimate for second-quarter revenues is pegged at $3.39 billion, indicating a year-over-year increase of 7.5%.
The consensus mark for earnings is pinned at $1.20 per share, indicating a 20% improvement from that reported in the prior-year period. The stock boasts a four-quarter average earnings surprise of 10.99%.
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Raytheon Technologies (RTX) Q2 Earnings Top, Sales View Raised
Raytheon Technologies Corporation’s (RTX - Free Report) second-quarter 2023 adjusted earnings per share (EPS) of $1.29 beat the Zacks Consensus Estimate of $1.17 by 10.3%. The bottom line also improved 11% from the year-ago quarter’s level of $1.16.
Including one-time items, the company reported GAAP earnings of 90 cents per share compared with 88 cents in the prior-year quarter.
Operational Performance
Raytheon Technologies’ second-quarter sales of $18,315 million beat the Zacks Consensus Estimate of $17,543 million by 4.4%. The figure also rose 12.3% from $16,314 million recorded in the year-ago period.
Total costs and expenses increased 12.7% year over year to $16,882 million. The company generated an operating profit of $1,458 million compared with $1,353 million in the prior-year quarter.
Raytheon Technologies Corporation Price, Consensus and EPS Surprise
Raytheon Technologies Corporation price-consensus-eps-surprise-chart | Raytheon Technologies Corporation Quote
Segmental Performance
Collins Aerospace: Sales at this segment improved 17% year over year to $5,850 million. This improvement can be attributed to higher commercial aftermarket and commercial OEM sales, backed by strong demand across commercial aerospace end markets. Also, an increase in military sales buoyed by higher development volume boosted this segment’s top line.
Its adjusted operating income totaled $837 million compared with the year-ago quarter’s level of $617 million.
Pratt & Whitney: This segment’s sales rose 15% year over year to $5,701 million. The improvement was due to growth in the commercial aftermarket and commercial OEM businesses, backed by higher shop visit volume and content, as well as higher engine deliveries and favorable mix across both Large Commercial Engines and Pratt & Whitney Canada units.
Adjusted operating profit amounted to $436 million compared with the year-ago quarter’s level of $303 million. This was driven by drop through on higher commercial aftermarket sales and favorable large commercial OEM mix.
Raytheon Intelligence & Space: This segment recorded second-quarter sales of $3,655 million, up 2% year over year, driven by higher sales from Sensing and Effects and Cyber and Services programs.
Its adjusted operating profit totaled $297 million, down 6% from $315 million generated in the corresponding period of 2022.
Raytheon Missiles & Defense: The unit recorded sales of $4,000 million, up 12% year over year. This was driven by higher sales volume from Air Power, Advanced Technology and Land Warfare & Air Defense programs.
The segment recorded an adjusted operating profit of $427 million, up 23% from that reported in the year-ago period.
Financial Update
Raytheon Technologies had cash and cash equivalents of $5,391 million as of Jun 30, 2023, compared with $6,220 million as of Dec 31, 2022.
Long-term debt was $32,723 million as of Jun 30, 2023, up from $30,694 million as of Dec 31, 2022.
Net cash outflow from operating activities amounted to $144 million as of Jun 30, 2023, against net cash inflow worth $1,762 million at the end of second-quarter 2022.
Its free cash outflow was $1,190 million at the end of the reported quarter against free cash inflow of $844 million at the end of second-quarter 2022.
Guidance
Raytheon Technologies has updated its financial guidance for 2023.
The company still projects adjusted EPS in the band of $4.95-$5.05, up from the earlier projected range of $4.90-$5.05. The Zacks Consensus Estimate for RTX’s 2023 EPS is pegged at $5.01, which lies above the midpoint of the company’s guided range.
Raytheon Technologies also raised its revenues guidance to the band of $73-$74 billion, up from the previously projected $72-$73 million. The Zacks Consensus Estimate for revenues is pegged at $72.20 billion, which lies below the mid-point of the company’s guidance.
RTX now expects to generate free cash flow of $4.3 billion, down from the earlier projected $4.8 billion.
Zacks Rank
Raytheon Technologies currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Q2 Defense Earnings
Lockheed Martin Corporation (LMT - Free Report) reported second-quarter 2023 adjusted earnings of $6.73 per share, which surpassed the Zacks Consensus Estimate of $6.43 by 4.7%. The bottom line also improved 6.5% from the year-ago quarter's figure.
Net sales amounted to $16.69 billion, which surpassed the Zacks Consensus Estimate of $15.86 billion by 5.3%. The top line rose 8.1% from $15.45 billion in the year-ago quarter.
Hexcel Corporation (HXL - Free Report) reported second-quarter 2023 adjusted earnings of 50 cents per share, which beat the Zacks Consensus Estimate of 48 cents by 4.2%. The bottom line improved 51.5% from the year-ago quarter’s level of 33 cents.
Net sales totaled $454 million, which beat the Zacks Consensus Estimate of $445 million by 2.2%. Also, the top line witnessed an improvement of 15.6% from the year-ago quarter’s $393 million.
Upcoming Q2 Defense Earnings
Textron Inc. (TXT - Free Report) is scheduled to report second-quarter 2023 results on Jul 27, before market open. The Zacks Consensus Estimate for second-quarter revenues is pegged at $3.39 billion, indicating a year-over-year increase of 7.5%.
The consensus mark for earnings is pinned at $1.20 per share, indicating a 20% improvement from that reported in the prior-year period. The stock boasts a four-quarter average earnings surprise of 10.99%.