Raytheon Technologies Tops Q2 Estimates, Lifts FY21 Guidance

Raytheon Technologies Corp RTX reported second-quarter net sales growth of 13% Y/Y to $15.88 billion, beating the consensus of $15.82 billion.
Adjusted Sales by segments: Collins Aerospace $4.55 billion (+6% Y/Y), Pratt & Whitney $4.28 billion (+19% Y/Y), Raytheon Intelligence & Space $3.81 billion (+12% Y/Y), and Raytheon Missiles & Defense $3.99 billion (+15% Y/Y).
The company said its results are driven by the growth in defense businesses and commercial aerospace recovery.
Adjusted EPS increased by 164% of $1.03, beating the consensus of $0.93.
Raytheon generated operating cash from continuing operations of $1.3 billion compared to $210 million a year ago and a free cash flow of $966 million for the quarter.
Backlog at the end of the quarter was $151.8 billion, of which $85.7 billion was from commercial aerospace and $66.1 billion was from defense and a book-to-bill ratio of 1.12.
The company repurchased $632 million of shares during the quarter.
The adjusted operating profit increased by 112.7% Y/Y to $1.86 billion, and the margin expanded by around 550 bps to 11.7%.
Adjusted segment operating profit margin improved to 9.4%, compared to 3.9% in 2Q20.
The company achieved approximately $185 million in incremental synergies.
FY21 Outlook: The company expects sales of $64.4 billion - $65.4 billion (up from prior of $63.9 billion - $65.4 billion) vs. a consensus of $65.37 billion.
It expects Adjusted EPS of $3.85 - $4.00, (up from prior expectations of $3.50 - $3.70) vs. consensus of $3.85. Free cash flow of $4.5 billion - $5.0 billion, up from the prior view of $4.5 billion.
Price Action: RTX shares are trading higher by 1.51% at $87.25 in premarket on Tuesday.

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