Raytheon Slips On Q2 Top-Line Miss, Warning On Supply Chain & Inflation Issues

Raytheon Technologies Corp's RTX second-quarter FY22 sales growth of 3% year-over-year to $16.31 billion, missing the consensus of $16.60 billion.
Adjusted EPS improved 13% Y/Y to $1.16, above the consensus of $1.12.
Collins Aerospace sales of $5.01 billion (+10% Y/Y) were driven by a 25% increase in commercial aftermarket and a 14% increase in commercial OE, and the adjusted operating margin expanded by 92 bps to 12.3%.
Pratt & Whitney adjusted sales of $4.97 billion (+16% Y/Y) and adjusted operating margin of 6.1%, up by 350 bps.
Raytheon Intelligence & Space adjusted sales declined 6% Y/Y to $3.57 billion and an adjusted operating margin of 8.8%, down by 210 bps.
Raytheon Missiles & Defense adjusted sales totaled $3.56 billion (-11% Y/Y), and the adjusted operating margin was 9.8%, down by 360 bps.
The total adjusted operating profit increased by 1.4% Y/Y to $1.88 billion.
Raytheon generated cash from operating activities year-to-date, totaling $1.76 billion, compared to $2.05 billion a year ago.
RTX held cash and equivalents of $4.77 billion as of June 30, 2022.
Backlog at the quarter was $161 billion, of which $96 billion was from commercial aerospace and $65 billion was from defense.
FY22 Outlook: Raytheon confirms the sales forecast of $67.75 billion - $68.75 billion, versus the consensus of $68.3 billion. Adjusted EPS of $4.60 - $4.80, versus the consensus of $4.77.
The company expects a free cash flow of ~$6.0 billion and confirms a share repurchase of at least $2.5 billion of RTX shares.
"Looking ahead, while we expect the global supply chain environment, labor availability and inflation will remain challenging near term, we are actively engaged with our customers and suppliers to meet demand and remain cost competitive," commented Chairman and CEO Greg Hayes.
Price Action: RTX shares traded lower by 3.20% at $91.54 on the last check Tuesday.

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