RTX Rockets Past Estimates: Q2 Sales and EPS Surge, 2024 Outlook Brightens

RTX Corporation RTX shares are trading higher after the company reported second-quarter results and raised its 2024 outlook.

RTX's adjusted net sales increase 8% year-over-year to $19.791 billion, beating the consensus of $19.28 billion. Adjusted EPS grew 9% to $1.41, above the consensus of $1.30.

Collins Aerospace's sales were $6.99 billion (+10% Y/Y), driven by a 12% increase in commercial aftermarket and 10% in commercial OE, and a 7% increase in defense. The adjusted operating margin expanded by 210 bps Y/Y to 16.4%.

Pratt & Whitney's sales were $6.80 billion (+19% Y/Y), driven by a 33% increase in commercial OE, a 16% increase in military, and a 15% rise in commercial aftermarket business. Adjusted operating margin of 7.9%, up 30 bps.

Raytheon's sales declined 3% year over year to $6.51 billion due to divesting its Cybersecurity, Intelligence, and Services business. The adjusted operating margin expanded by 90 bps to 10.8%.

At the end of the quarter, the backlog was $206 billion, of which $129 billion was from commercial aerospace and $77 billion was from defense.

RTX’s operating cash flow for the quarter totaled $2.73 billion compared to $719 million last year and free cash of $2.19 billion.

FY24 Outlook: RTX expects adjusted sales of $78.75 billion-$79.5 billion (prior $78 billion-$79 billion), versus the consensus of $78.994 billion; sees adjusted EPS of $5.35 – $5.45 (prior $5.25 – $5.40) versus the consensus of $5.38.

The company expects a free cash flow of ~$4.7 billion in the year, down from the prior $5.7 billion.

Recently, Pratt & Whitney announced more than 950 GTF engine orders and commitments since the beginning of 2024.

Price Action: RTX shares are trading higher by 9.46% at $114.74 at the last check Thursday.