Back to top

Image: Bigstock

Raytheon Technologies (RTX) Q3 Earnings Top, EPS View Up

Read MoreHide Full Article

Raytheon Technologies Corporation’s (RTX - Free Report) third-quarter 2021 adjusted earnings per share (EPS) of $1.26 outpaced the Zacks Consensus Estimate of $1.07 by 17.8%. Moreover, the bottom-line figure improved 125% from the year-ago quarter’s adjusted earnings of 56 cents.

Including one-time items, the company reported GAAP earnings of 93 cents compared with 10 cents per share recorded in the year-ago quarter.

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

Operational Performance

Raytheon Technologies’ third-quarter sales of $16,213 million missed the Zacks Consensus Estimate of $16,494 million by 1.7%. The sales figure, however, improved 9.9% from $14,747 million recorded in the year-ago quarter.

Total costs and expenses slipped 0.4% year over year to $14,994 million. The company generated an operating profit of $1,343 million compared with $434 million in the year-ago quarter.

Segmental Performance

Collins Aerospace: Sales at this segment improved 7% year over year to $4,592 million in third-quarter 2021 due to higher commercial aftermarket sales.

Its adjusted operating income came in at $480 million compared with the year-ago quarter’s level of $73 million.

Pratt & Whitney: Sales at this segment rose 35% year over year to $4,725 million, driven by growth in the commercial aftermarket, commercial OEM as well as military businesses.

Its adjusted operating profit was $189 million against the year-ago quarter’s operating loss of $43 million.

Raytheon Intelligence & Space: This segment recorded third-quarter sales of $3,740 million, almost flat year over year. Its operating profit was $391 million, up 12%.

Raytheon Missiles & Defense: This unit recorded sales of $3,902 million, up 5% year over year. The unit recorded $490 million of operating profit in the third quarter, up 9%.

Financial Update

Raytheon Technologies had cash and cash equivalents of $7,476 million as of Sep 30, 2021, compared with $8,802 million as of Dec 31, 2020.

Long-term debt was $30,768 million, as of Sep 30, 2021, down from $31,026 million as of Dec 31, 2020.

Net cash inflow from operating activities amounted to $1,932 million at the end of third-quarter 2021 compared with $1,622 million at the end of third-quarter 2020.

Its free cash flow was $2,801 million compared with $1,792 million at the end of third-quarter 2020.

Guidance

Raytheon Technologies raised the entire earnings guidance range for 2021 and tweaked revenue expectations.

The company currently projects adjusted EPS in the range of $4.10-$4.20, compared with the earlier guidance of $3.85-$4.00. The Zacks Consensus Estimate for EPS, pegged at $4.03, lies below the newly guided range.

The company currently expects to record revenues worth approximately $64.50 billion compared with its earlier projection of $64.4-$65.4 billion. The Zacks Consensus Estimate for revenues, pegged at $65.35 billion, is within the company’s new guidance.

The company currently expects to generate free cash flow worth approximately $5 billion compared with the earlier range of $4.5-$5 billion in 2021.

Zacks Rank

Raytheon Technologies currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A Recent Defense Release

Hexcel Corporation (HXL - Free Report) reported third-quarter 2021 adjusted earnings of 13 cents per share, which exceeded the Zacks Consensus Estimate of 8 cents by 62.5%.

Upcoming Defense Releases

General Dynamics (GD - Free Report) is scheduled to release its Q3 numbers on Oct 27.

Boeing (BA - Free Report) is also scheduled to release its Q3 numbers on Oct 27.