Raytheon, Collins Aerospace Drive RTX's Strong Q4 Growth, Adjusted EPS Up 19%

RTX Corporation RTX shares are trading higher after the company's fourth-quarter fiscal 2024 results exceeded street expectations.

Net sales increased 9% year-over-year (Y/Y) to $21.623 billion, beating the consensus of $20.535 billion.

Adjusted EPS grew 19% Y/Y to $1.54, above the consensus of $1.38.

RTX's operating cash flow for the fourth quarter totaled $1.6 billion and, a free cash flow stood at $0.5 billion.

The company returned $3.7 billion of capital to shareholders this quarter, bringing the total capital returned since the merger to over $33 billion in the year.

Here’s a closer look at the segments:

• Collins Aerospace: Sales were $7.537 billion (+6% Y/Y), led by a 13% Y/Y increase in defense and 12% Y/Y growth in commercial aftermarket. This was partially offset by a 6% decline in commercial OE sales. Adjusted operating profit surged 17% Y/Y to $1.207 billion, aided by higher commercial aftermarket and defense volume.
• Pratt & Whitney: Sales were $7.569 billion (+18% Y/Y), driven by a 17% Y/Y increase in commercial aftermarket, 8% Y/Y military growth, and a 31% Y/Y rise in commercial OE. Adjusted operating profit escalated 77% Y/Y to $717 million in the quarter.
• Raytheon: Sales rose 4% Y/Y to $7.157 billion on higher volume in land and air defense systems, including Global Patriot, NASAMS, and counter-UAS programs, along with the restart of contracts with a Middle Eastern customer. Excluding the divestiture, sales rose 10% Y/Y. The adjusted operating profit upped 18% Y/Y to $728 million in the quarter. At the end of the quarter, the backlog was $218 billion, of which $125 billion was from commercial aerospace and $93 billion was from defense.

Outlook 2025: RTX expects adjusted sales of $83.0 billion-$84.0 billion vs. the consensus of $84.47 billion and adj. EPS of  $6.00-$6.15 vs. street view of $6.07.

The company expects free cash flow of $7.0 billion – $7.5 billion for the year.

Investors can gain exposure to the stock via iShares U.S. Aerospace & Defense ETF ITA and First Trust Exchange-Traded Fund First Trust Indxx Aerospace & Defense ETF MISL.

Price Action: RTX shares are up 4.49% at $130.67 premarket at the last check Tuesday.

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