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Raytheon Technologies' (RTX) Q1 Earnings Beat, Sales Miss

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Raytheon Technologies Corporation’s (RTX - Free Report) first-quarter 2021 adjusted earnings per share (EPS) of 90 cents outpaced the Zacks Consensus Estimate of 88 cents by 2.3%. However, the bottom-line figure declined 32.3% from the year-ago quarter’s adjusted earnings of $1.33.

Including one-time items, the company reported GAAP earnings of 51 cents compared with 50 cents per share in the year-ago quarter.

The year-over-year improvement in the bottom line is attributable to higher year-over-year revenues generated in the reported quarter.

 

 

Operational Performance

Raytheon Technologies’ first-quarter sales of $15,251 million missed the Zacks Consensus Estimate of $15,379 million by 0.8%. The sales figure however increased 34.3% from $11,360 million recorded in the year-ago quarter.

Total costs and expenses increased 42.3% year over year to $14,346 million. The company generated operating profit of $1,013 million compared with $1.295 million in the year-ago quarter.

Segmental Performance

Collins Aerospace: Adjusted sales at this segment plunged 32% year over year to $4,370 million in first-quarter 2021 due to lower commercial OEM sales, military sales as well as commercial aftermarket sales.
Its adjusted operating income came in at $314 million compared with the year-ago quarter’s level of $1,246 million.

Pratt & Whitney: Adjusted sales at this segment declined 24% year over year to $4,030 million due to a significant reduction in shop visits and related spare part sales as well as lower commercial engine deliveries.
Its adjusted operating profit was $20 million compared with the year-ago quarter’s operating income of $475 million.

Raytheon Intelligence & Space: This segment recorded first-quarter sales of $3,765 million and generated $388 million of adjusted operating profit.

Raytheon Missiles & Defense: This unit recorded sales of $3,793 million and $496 million of adjusted operating profit in the quarter.

Financial Update

Raytheon Technologies had cash and cash equivalents of $8,579 million as of Mar 31, 2021 ,  compared with $8,802 million as of Dec 31, 2020.

Long-term debt was $29,935 million, as of Mar 31, 2021, down from $31,026 million as of Dec 31, 2020.

Net cash inflow from operating activities amounted to $723 million at the end of first-quarter 2021 compared with $1,132 million at the end of first-quarter 2020.

Its free cash flow was $336 million compared with $807 million at the end of first-quarter 2020.

Guidance

Raytheon Technologies has raised the lower end of its revenue and earnings view for 2021.

The company currently projects to generate EPS in the range of $3.50-$3.70, compared with the earlier guidance of $3.40-$3.70.  The Zacks Consensus Estimate for EPS, pegged at $3.64, lies above the mid-point of the newly guided range.

The company currently expects to record revenues in the band of $63.9-$65.4 billion, compared with the prior guidance of $63.4-$65.4 billion. The Zacks Consensus Estimate for revenues, pegged at $65.13 billion, is higher than the mid-point of the guided range.

The company continues to expect to generate free cash flow worth $4.5 billion during 2021.

Zacks Rank

Raytheon Technologies currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Lockheed Martin (LMT - Free Report) reported first-quarter 2021 earnings of $6.56 per share, which surpassed the Zacks Consensus Estimate of $6.32 by 3.8%. The bottom line also improved 7.9% from the year-ago quarter’s $6.08.

Hexcel Corporation (HXL - Free Report) reported first-quarter 2021 loss of 10 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 16 cents.

Upcoming Defense Releases

General Dynamics (GD - Free Report)   is scheduled to report first-quarter 2021 results on Apr 28.

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