Key Points
- Q2 sales hit $19.7 billion, an 8% year-over-year growth.
- GAAP EPS plunges by 91% to $0.08, while adjusted EPS grows by 9% to $1.41.
- Free cash flow rises to $2.2 billion, but full-year guidance is cut to $4.7 billion.
RTX Corporation (RTX 1.35%), an aerospace and defense company, published its Q2 2024 earnings on July 25. The quarter showed mixed results, with the company posting $19.7 billion in sales, an 8% rise over the prior year. However, GAAP EPS fell to $0.08 due to various charges, while adjusted EPS rose by 9% to $1.41. Despite achieving free cash flow of $2.2 billion, RTX lowered its full-year guidance from $5.7 billion to $4.7 billion due to anticipated legal settlements.
| Metric | Q2 2024 | Management’s Guidance | Q2 2023 | % Change YoY |
|---|---|---|---|---|
| Reported Sales | $19.7 billion | $78.75 - $79.5 billion (Full-Year) | $18.3 billion | 8% |
| GAAP EPS | $0.08 | $0.90 | -91% | |
| Adjusted EPS | $1.41 | $5.35 - $5.45 (Full-Year) | $1.29 | 9% |
| Free Cash Flow | $2.2 billion | $4.7 billion (Full-Year) | $193 million | 1039% |
| Source: Expectations based on management's guidance, as provided in 2024-04-23 earnings report. |
Overview of RTX Corporation
RTX Corporation operates in the aerospace and . It has three main segments: Collins Aerospace, Pratt & Whitney, and Raytheon.
Collins Aerospace supplies advanced aerospace and defense products, including service solutions. Pratt & Whitney is known for its aircraft engines. Raytheon specializes in defense technology, including threat detection and mitigation.
Recent focuses include major contracts, customer dependencies, and technological advancements. Key success factors involve managing global supply chains, cost control, and substantial R&D investments.
Quarterly Highlights
During the quarter, Collins Aerospace saw a 10% increase in sales to $6.999 billion, driven by a 12% rise in commercial aftermarket and a 10% rise in commercial Original Equipment (OE). Operating profit increased by 24% to $1.118 billion.
Pratt & Whitney posted a 19% increase in sales, reaching $6.802 billion, propelled by a 33% rise in commercial OE and 16% growth in military sales. Operating profit surged by 136% to $542 million.
Raytheon's sales declined by 3% to $6.511 billion due to divestitures but saw sales increase 4%. Operating profit dropped by 80% to $127 million, primarily due to a $575 million charge on a fixed-price development contract. Adjusted operating profit rose by 7% to $709 million.
RTX maintained a strong backlog of $206 billion, with $129 billion in commercial and $77 billion in defense, signaling steady demand and future revenue assurance.
Looking Forward
Management provided an upbeat outlook for full-year adjusted sales, increasing to $78.75-$79.5 billion from $78.0-$79.0 billion. The adjusted EPS outlook also saw an upward revision to $5.35-$5.45 from $5.25-$5.40. However, full-year free cash flow guidance was revised downward to approximately $4.7 billion from $5.7 billion, citing anticipated legal settlements.
