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What Awaits Raytheon Technologies (RTX) in Q2 Earnings?

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Raytheon Technologies Corp. (RTX - Free Report) is set to release second-quarter 2021 results on Jul 27, before market open.

The company delivered an earnings surprise of 2.27% in the last reported quarter. Moreover, Raytheon delivered an earnings surprise of 81.83% in the last four quarters, on average.

Factors to Note

The merger between legacy missile-maker Raytheon Company with multinational conglomerate United Technologies, which resulted into the formation of Raytheon Technologies, completed a year on Apr 3. Consequently, Raytheon Technologies’ second-quarter results are projected to benefit from positive synergies from the merger.

Incremental cost synergies from the acquisition of Rockwell Collins are also expected to bolster  the company’s soon-to-be-reported quarterly results.

A gradual improvement in global air travel has been observed over the past couple of quarters and a similar trend is likely to have boosted the company’s commercial aftermarket sales in the second quarter. Higher volume across multiple mission areas are expected to have boosted its defense sales. Cumulatively, these factors are expected to have contributed favorably to the company’s overall revenues in the second quarter.

Raytheon Technologies’ cost-control initiatives and favorable sales mix are expected to have benefited its second-quarter earnings. Moreover, improving trends in commercial aerospace are expected to have boosted operating profit, thereby favorably contributing to the company’s overall bottom-line growth.

Q2 Expectations

Currently, the Zacks Consensus Estimate for Raytheon Technologies’ earnings is pegged at 92 cents on revenues of $15.78 billion, indicating 130% and 12.2% improvement from the respective year-ago quarter numbers.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Raytheon Technologies this time around. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for earnings beat. This is not the case here, as given below

Earnings ESP: Raytheon Technologies has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are a couple of defense companies you may want to consider, as these have the right combination of elements to post an earnings beat this season:

Leidos Holdings (LDOS - Free Report) has an Earnings ESP of +4.46% and a Zacks Rank #2.

General Dynamics (GD - Free Report) has an Earnings ESP of +1.98% and a Zacks Rank #3.

Lockheed Martin (LMT - Free Report) has an Earnings ESP of +0.92% and a Zacks Rank #3.

 

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