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Why Is RTX (RTX) Up 1.8% Since Last Earnings Report?
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A month has gone by since the last earnings report for RTX (RTX - Free Report) . Shares have added about 1.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is RTX due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
RTX Q3 Earnings Surpass Estimates by 5%, Sales View Raised
RTX Corporation’s third-quarter 2023 adjusted earnings per share (EPS) of $1.25 beat the Zacks Consensus Estimate of $1.19 by 5%. The bottom line also improved 3.3% from the year-ago quarter’s level of $1.21.
Including one-time items, the company reported GAAP loss of 68 cents per share against earnings of 94 cents generated in the prior-year quarter.
Operational Performance
RTX’s third-quarter adjusted sales of $18,952 million beat the Zacks Consensus Estimate of $18,709 million by 1.3%.
The company reported GAAP sales of $13,494 million compared with $16,951 million in the third quarter of 2022.
Total costs and expenses decreased 4% year over year to $14,863 million. The company incurred an operating loss of $1,396 million against an operating profit of $1,520 million in the prior-year quarter.
Segmental Performance
Collins Aerospace: Adjusted sales at this segment increased 17% year over year to $6,686 million. This improvement can be attributed to higher commercial aftermarket and commercial OEM sales, backed by strong demand across commercial aerospace end markets.
The adjusted operating income totaled $1,043 million compared with the year-ago quarter’s level of $756 million.
Pratt & Whitney: This segment’s adjusted sales rose 18% year over year to $6,327 million. The improvement was due to growth in the commercial aftermarket and commercial OEM businesses, backed by higher volume and content, favorable mix across commercial aftermarket, as well as a favorable OE volume and mix in Large Commercial Engines. Increased military sales driven by higher F135 development and sustainment volume also contributed to this unit’s sales growth.
Adjusted operating profit amounted to $413 million compared with the year-ago quarter’s level of $318 million. This improvement was driven by drop through on higher commercial aftermarket sales.
Raytheon: This segment recorded third-quarter sales of $6,472 million, up 3% year over year, driven by higher sales volume fromNaval Power, including AIM-9X, and Advanced Technology classified programs.
The adjusted operating profit totaled $570 million, down 18% from $694 million recorded in the corresponding period of 2022.
Financial Update
RTX had cash and cash equivalents of $5,456 million as of Sep 30, 2023, compared with $6,220 million as of Dec 31, 2022.
Long-term debt was $32,701 million as of Sep 30, 2023, up from $30,694 million as of Dec 31, 2022.
Net cash flow from operating activities was $3,316 million as of Sep 30, 2023, compared with $778 million at the end of third-quarter 2022.
Free cash flow totaled $2,752 million at the end of the reported quarter compared with $263 million at the end of third-quarter 2022.
Guidance
RTX has updated its financial guidance for 2023.
The company currently projects adjusted EPS in the band of $4.98-$5.02 compared with the earlier guidance of $4.95-$5.05. The Zacks Consensus Estimate for RTX’s 2023 EPS is pegged at $5.01, which lies just above the midpoint of the company’s guided range.
RTX has raised its adjusted sales guidance to $74 billion, up from the earlier projected band of $73-$74 billion. The Zacks Consensus Estimate for sales is pegged at $73.75 billion, which lies below the company’s guidance.
The company now expects free cash flow of $4.8 billion, up from the previously anticipated $4.3 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -5.22% due to these changes.
VGM Scores
Currently, RTX has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, RTX has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
RTX is part of the Zacks Aerospace - Defense industry. Over the past month, Lockheed Martin (LMT - Free Report) , a stock from the same industry, has gained 0.6%. The company reported its results for the quarter ended September 2023 more than a month ago.
Lockheed reported revenues of $16.88 billion in the last reported quarter, representing a year-over-year change of +1.8%. EPS of $6.77 for the same period compares with $6.87 a year ago.
Lockheed is expected to post earnings of $7.26 per share for the current quarter, representing a year-over-year change of -6.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.1%.
Lockheed has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Why Is RTX (RTX) Up 1.8% Since Last Earnings Report?
A month has gone by since the last earnings report for RTX (RTX - Free Report) . Shares have added about 1.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is RTX due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
RTX Q3 Earnings Surpass Estimates by 5%, Sales View Raised
RTX Corporation’s third-quarter 2023 adjusted earnings per share (EPS) of $1.25 beat the Zacks Consensus Estimate of $1.19 by 5%. The bottom line also improved 3.3% from the year-ago quarter’s level of $1.21.
Including one-time items, the company reported GAAP loss of 68 cents per share against earnings of 94 cents generated in the prior-year quarter.
Operational Performance
RTX’s third-quarter adjusted sales of $18,952 million beat the Zacks Consensus Estimate of $18,709 million by 1.3%.
The company reported GAAP sales of $13,494 million compared with $16,951 million in the third quarter of 2022.
Total costs and expenses decreased 4% year over year to $14,863 million. The company incurred an operating loss of $1,396 million against an operating profit of $1,520 million in the prior-year quarter.
Segmental Performance
Collins Aerospace: Adjusted sales at this segment increased 17% year over year to $6,686 million. This improvement can be attributed to higher commercial aftermarket and commercial OEM sales, backed by strong demand across commercial aerospace end markets.
The adjusted operating income totaled $1,043 million compared with the year-ago quarter’s level of $756 million.
Pratt & Whitney: This segment’s adjusted sales rose 18% year over year to $6,327 million. The improvement was due to growth in the commercial aftermarket and commercial OEM businesses, backed by higher volume and content, favorable mix across commercial aftermarket, as well as a favorable OE volume and mix in Large Commercial Engines. Increased military sales driven by higher F135 development and sustainment volume also contributed to this unit’s sales growth.
Adjusted operating profit amounted to $413 million compared with the year-ago quarter’s level of $318 million. This improvement was driven by drop through on higher commercial aftermarket sales.
Raytheon: This segment recorded third-quarter sales of $6,472 million, up 3% year over year, driven by higher sales volume fromNaval Power, including AIM-9X, and Advanced Technology classified programs.
The adjusted operating profit totaled $570 million, down 18% from $694 million recorded in the corresponding period of 2022.
Financial Update
RTX had cash and cash equivalents of $5,456 million as of Sep 30, 2023, compared with $6,220 million as of Dec 31, 2022.
Long-term debt was $32,701 million as of Sep 30, 2023, up from $30,694 million as of Dec 31, 2022.
Net cash flow from operating activities was $3,316 million as of Sep 30, 2023, compared with $778 million at the end of third-quarter 2022.
Free cash flow totaled $2,752 million at the end of the reported quarter compared with $263 million at the end of third-quarter 2022.
Guidance
RTX has updated its financial guidance for 2023.
The company currently projects adjusted EPS in the band of $4.98-$5.02 compared with the earlier guidance of $4.95-$5.05. The Zacks Consensus Estimate for RTX’s 2023 EPS is pegged at $5.01, which lies just above the midpoint of the company’s guided range.
RTX has raised its adjusted sales guidance to $74 billion, up from the earlier projected band of $73-$74 billion. The Zacks Consensus Estimate for sales is pegged at $73.75 billion, which lies below the company’s guidance.
The company now expects free cash flow of $4.8 billion, up from the previously anticipated $4.3 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -5.22% due to these changes.
VGM Scores
Currently, RTX has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, RTX has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
RTX is part of the Zacks Aerospace - Defense industry. Over the past month, Lockheed Martin (LMT - Free Report) , a stock from the same industry, has gained 0.6%. The company reported its results for the quarter ended September 2023 more than a month ago.
Lockheed reported revenues of $16.88 billion in the last reported quarter, representing a year-over-year change of +1.8%. EPS of $6.77 for the same period compares with $6.87 a year ago.
Lockheed is expected to post earnings of $7.26 per share for the current quarter, representing a year-over-year change of -6.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.1%.
Lockheed has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.