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Raytheon Technologies (RTX) Q1 Earnings Top, Sales View Cut

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Raytheon Technologies Corporation’s (RTX - Free Report) 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.

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.

Upcoming Releases

Here are a few defense companies that are yet to release their quarterly results:

Northrop Grumman (NOC - Free Report) is scheduled to release its first-quarter 2022 results on Apr 28. The stock has a Zacks Rank #3.

Northrop Grumman has a four-quarter average earnings surprise of 11.05%. The long-term earnings growth rate of NOC stands at 6.2%. The Zacks Consensus Estimate for Northrop’s first-quarter sales and earnings is pegged at $8.88 billion and $5.95 per share, respectively.

Spirit Aerosystems (SPR - Free Report) is set to announce its first-quarter results on May 4. The stock has a Zacks Rank #3. It has a four-quarter average negative earnings surprise of 14.56%.

The long-term earnings growth rate of SPR stands at 8.5%. The Zacks Consensus Estimate for Spirit Aerosystems’ first-quarter sales is pegged at $1.09 billion. The consensus estimate for the bottom line is pegged at 61 cents per share.

CAE (CAE - Free Report) is expected to release ts fourth-quarter fiscal 2022 results soon. It has a Zacks Rank #3. CAE delivered a four-quarter average earnings surprise of 0.72%.

The long-term earnings growth rate of CAE is pegged at 8%. The Zacks Consensus Estimate for CAE’s first-quarter sales and earnings is pegged at $744.5 million and 18 cents per share, respectively.

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