What's Going On With RTX Shares Today

RTX Corporation  RTX reported second-quarter FY23 sales growth of 12% year-over-year to $18.32 billion, +13% organically, beating the consensus of $17.68 billion.

According to a regulatory filing, Raytheon Technologies Corporation changed its name to RTX Corporation, effective July 17, 2023.

Adjusted EPS improved 11% Y/Y to $1.29, beating the consensus of $1.18.

At the end of the quarter, the backlog was $185 billion, of which $112 billion was from commercial aerospace and $73 billion was from defense.

Collins Aerospace's sales of $5.85 billion (+17% Y/Y) were driven by a 29% increase in commercial aftermarket, a 14% increase in commercial OE, and a 5% increase in military. The adjusted operating margin expanded by 200 bps to 14.3%.

Pratt & Whitney adjusted sales of $5.70 billion (+15% Y/Y) and adjusted operating margin of 7.6%, up by 150 bps.

Raytheon Intelligence & Space's sales increased by 2% Y/Y to $3.66 billion, and an adjusted operating margin contracted by 70 bps to 8.1%.

Raytheon Missiles & Defense sales totaled $4.00 billion (+12% Y/Y), and the adjusted operating margin was 10.7%, up 90 bps.

Also Read: Safran Acquires Collins Aerospace's Actuation And Flight Control Business In $1.8B Deal

During the quarter, the company repurchased $596 million of RTX shares.

"Based on the strong performance year-to-date and strong end-markets, we are raising our full year sales outlook and tightening our adjusted EPS outlook. However, we are lowering our free cash flow outlook to reflect the impact of an issue that has recently come to light, which will require Pratt & Whitney to remove certain engines from service for inspection earlier than expected," commented RTX Chairman and CEO Greg Hayes.

The company stated that Pratt & Whitney has determined that a rare condition in powder metal used to manufacture certain engine parts will require accelerated fleet inspection. The business anticipates that a significant portion of the PW1100G-JM engine fleet, which powers the A320neo, will require accelerated removals and inspections within the next nine to twelve months.

RTX's operating cash flow from continuing operations for the quarter totaled $719 million, compared to $1.29 billion in 2Q22. Free cash flow stood at $193 million.

FY23 Outlook, Raised: RTX expects sales of $73 billion-$74 billion, up from $72 billion - $73 billion versus the consensus of $72.75 billion; sees to adjusted EPS of $4.95-$5.05, up from $4.90-$5.05, versus the consensus of $5.02.

The company expects a free cash flow of ~$ 4.3 billion, down from ~$4.8 billion, and confirms a share repurchase of at least $3 billion of RTX shares.

Price Action: RTX shares are trading down by 13.75% at $83.67 on the last check Tuesday.