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Will Segmental Performance Aid Raytheon (RTX) in Q2 Earnings?
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Raytheon Technologies Corp. (RTX - Free Report) is set to release second-quarter 2023 results on Jul 25, before market open.
Raytheon delivered an average earnings surprise of 6.23% in the last four quarters. Steady improvement in air travel as well as solid order growth for its missile products are likely to benefit its quarterly results amid supply-chain disruptions.
Pratt & Whitney and Collins: Key Growth Catalysts
The merger between Raytheon Company and multinational conglomerate United Technologies to form Raytheon Technologies was completed in April 2021. Notably, RTX’s realized gross merger synergies came close to $1.5 billion as of Mar 31, 2023. We may expect its second-quarter top-line results to duly reflect the benefits of this merger.
Raytheon Technologies Corporation Price and EPS Surprise
Steady growth in domestic as well as international air travel is likely to have boosted the company’s overall commercial original equipment manufacturer and aftermarket sales. This, along with improving productivity and cost in support of the high-volume GTF and F135 programs, as well as RTX’s expanding maintenance, repair and overhaul networks might have driven the sales growth expectation for both Pratt & Whitney and Collins business units.
The Zacks Consensus Estimate for Pratt & Whitney’s second-quarter adjusted revenues is pegged at $6,075.1 million, indicating a year-over-year improvement of 22.3%. The consensus mark for Collins Aerospace’s revenues is pinned at $5,730.7 million, indicating a 14.4% increase from the prior-year quarter’s level.
Solid Outlook for Missile and Defense
Growing global budgets have led Raytheon to witness solid order growth in the recent past. This, in turn, might have boosted the Missiles & Defense segment’s second-quarter performance. In particular, higher volume from advanced technology as well as air power programs is likely to have boosted this segment’s top line in the soon-to-be-reported quarter.
The Zacks Consensus Estimate for Missiles & Defense segment’s second-quarter adjusted revenues is pegged at $3,805.4 million, indicating year-over-year growth of 7%.
Other Factors to Note
Strong sales performance from the majority of Raytheon’s businesses, as mentioned above, might have boosted its overall second-quarter revenues.
Solid revenue growth expectations must have boosted RTX’s overall bottom-line performance amid supply-chain challenges.
Q2 Expectations
The Zacks Consensus Estimate for Raytheon’s second-quarter earnings is pegged at $1.17 per share on revenues of $17.54 billion. While the bottom-line estimate indicates a year-over-year increase of 0.9%, the top-line estimate implies an improvement of 7.5%.
What Our Model Predicts
Our proven model does not conclusively predict an earnings beat for Raytheon 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 an earnings beat. This is not the case here.
Currently, Raytheon has an Earnings ESP of -0.43% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Below are three defense stocks that have the right combination of elements to post an earnings beat this reporting cycle.
Huntington Ingalls delivered a four-quarter average earnings surprise of 8.09%. The consensus estimate for earnings is pegged at $3.14 per share, while that for sales is pinned at $2.73 billion.
L3Harris Technologies (LHX - Free Report) is scheduled to release second-quarter results on Jul 26. LHX has an Earnings ESP of +1.67% and a Zacks Rank #3.
L3Harris delivered a four-quarter negative earnings surprise of 0.37%, on average. The Zacks Consensus Estimate for LHX’s earnings is pegged at $2.91 per share, while that for sales is pinned at $4.34 billion.
Embraer SA (ERJ - Free Report) is expected to report second-quarter results soon. ERJ has an Earnings ESP of +25% and a Zacks Rank #3.
Embraer delivered a four-quarter average negative earnings surprise of 253.33%. The consensus mark for ERJ’s earnings is pegged at 12 cents per share, while that for sales is pinned at $1.16 billion.
Image: Bigstock
Will Segmental Performance Aid Raytheon (RTX) in Q2 Earnings?
Raytheon Technologies Corp. (RTX - Free Report) is set to release second-quarter 2023 results on Jul 25, before market open.
Raytheon delivered an average earnings surprise of 6.23% in the last four quarters. Steady improvement in air travel as well as solid order growth for its missile products are likely to benefit its quarterly results amid supply-chain disruptions.
Pratt & Whitney and Collins: Key Growth Catalysts
The merger between Raytheon Company and multinational conglomerate United Technologies to form Raytheon Technologies was completed in April 2021. Notably, RTX’s realized gross merger synergies came close to $1.5 billion as of Mar 31, 2023. We may expect its second-quarter top-line results to duly reflect the benefits of this merger.
Raytheon Technologies Corporation Price and EPS Surprise
Raytheon Technologies Corporation price-eps-surprise | Raytheon Technologies Corporation Quote
Steady growth in domestic as well as international air travel is likely to have boosted the company’s overall commercial original equipment manufacturer and aftermarket sales. This, along with improving productivity and cost in support of the high-volume GTF and F135 programs, as well as RTX’s expanding maintenance, repair and overhaul networks might have driven the sales growth expectation for both Pratt & Whitney and Collins business units.
The Zacks Consensus Estimate for Pratt & Whitney’s second-quarter adjusted revenues is pegged at $6,075.1 million, indicating a year-over-year improvement of 22.3%. The consensus mark for Collins Aerospace’s revenues is pinned at $5,730.7 million, indicating a 14.4% increase from the prior-year quarter’s level.
Solid Outlook for Missile and Defense
Growing global budgets have led Raytheon to witness solid order growth in the recent past. This, in turn, might have boosted the Missiles & Defense segment’s second-quarter performance. In particular, higher volume from advanced technology as well as air power programs is likely to have boosted this segment’s top line in the soon-to-be-reported quarter.
The Zacks Consensus Estimate for Missiles & Defense segment’s second-quarter adjusted revenues is pegged at $3,805.4 million, indicating year-over-year growth of 7%.
Other Factors to Note
Strong sales performance from the majority of Raytheon’s businesses, as mentioned above, might have boosted its overall second-quarter revenues.
Solid revenue growth expectations must have boosted RTX’s overall bottom-line performance amid supply-chain challenges.
Q2 Expectations
The Zacks Consensus Estimate for Raytheon’s second-quarter earnings is pegged at $1.17 per share on revenues of $17.54 billion. While the bottom-line estimate indicates a year-over-year increase of 0.9%, the top-line estimate implies an improvement of 7.5%.
What Our Model Predicts
Our proven model does not conclusively predict an earnings beat for Raytheon 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 an earnings beat. This is not the case here.
Currently, Raytheon has an Earnings ESP of -0.43% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Below are three defense stocks that have the right combination of elements to post an earnings beat this reporting cycle.
Huntington Ingalls Industries (HII - Free Report) is expected to release second-quarter results on Aug 3. HII has an Earnings ESP of +2.31% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Huntington Ingalls delivered a four-quarter average earnings surprise of 8.09%. The consensus estimate for earnings is pegged at $3.14 per share, while that for sales is pinned at $2.73 billion.
L3Harris Technologies (LHX - Free Report) is scheduled to release second-quarter results on Jul 26. LHX has an Earnings ESP of +1.67% and a Zacks Rank #3.
L3Harris delivered a four-quarter negative earnings surprise of 0.37%, on average. The Zacks Consensus Estimate for LHX’s earnings is pegged at $2.91 per share, while that for sales is pinned at $4.34 billion.
Embraer SA (ERJ - Free Report) is expected to report second-quarter results soon. ERJ has an Earnings ESP of +25% and a Zacks Rank #3.
Embraer delivered a four-quarter average negative earnings surprise of 253.33%. The consensus mark for ERJ’s earnings is pegged at 12 cents per share, while that for sales is pinned at $1.16 billion.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.