RTX Reports Strong Quarter with Higher Earnings and Sales

Aerospace and defense giant RTX has revealed its third-quarter earnings, surpassing Wall Street expectations. With adjusted earnings per share of $1.25 from sales of $19 billion, RTX outperformed predictions of $1.22 a share from sales of $18.6 billion. This impressive performance marks an improvement from the previous year’s third quarter, when RTX reported EPS of $1.21 from sales of $17 billion.

In addition to the positive quarterly results, RTX has updated its full-year guidance. The company now projects 2023 earnings per share of approximately $5 and adjusted sales of $74 billion. This upward revision comes after RTX raised its sales guidance for the second quarter to a midpoint of $73.5 billion, up from a prior midpoint of $72.5 billion. Earnings guidance has also been increased to a midpoint of $5 per share from a prior midpoint of $4.98. According to FactSet, Wall Street analysts currently estimate 2023 earnings of $5.01 per share.

RTX has shown strong confidence in its financial outlook by raising its free cash flow guidance to $4.8 billion, up from the previous estimate of $4.3 billion.

The market has responded positively to RTX’s latest report, with shares surging by 8.2% in premarket trading to reach $79.10 per share. Furthermore, both the S&P 500 and Dow Jones Industrial Average futures have seen around a 0.6% and 0.5% increase, respectively.

Overall, RTX’s solid performance in the third quarter speaks to its resilience and commitment to delivering strong financial results.

Significant Progress in Assessment of Manufacturing Matter at RTX

RTX shares experienced a significant decline of 10.2% following the second-quarter earnings report. This drop was a direct result of a problem encountered with the geared turbofan jet engine, which powers planes such as the Airbus A321.

According to RTX CEO Greg Hayes, there have been significant advancements in assessing the Pratt & Whitney powder metal manufacturing matter. It is reassuring to note that the financial impact is expected to align with the previously disclosed charge.

While focusing on executing fleet management plans, RTX is relentlessly working towards minimizing further disruption to their customers. Fortunately, the company does not anticipate any significant future incremental impact due to these plans.

This absence of additional charges comes as good news as there were several earnings and sales charges in the third quarter related to the issue. However, investors were already prepared for these charges. The after-tax impact on earnings totaled approximately $2.2 billion, resulting in an unadjusted EPS loss of 68 cents.

The past 12 months have been challenging for RTX, with shares declining by about 19%. Clearly, the troubles faced with the geared turbofan engine have heavily influenced investor sentiment. In contrast, competitors like General Electric (GE) experienced an 86% increase in shares, while Boeing (BA) saw a growth of about 27%.

RTX remains dedicated to their continuous efforts in resolving manufacturing matters, reducing disruptions, and providing an improved experience for their valued customers.