Zinger Key Points
- RTX beats Q4 FY24 expectations with $21.623B sales (+9% Y/Y) and $1.54 EPS (+19% Y/Y). Backlog hits $218B.
- 2025 outlook: $83-$84B sales, $6.00-$6.15 EPS, and $7-$7.5B free cash flow. Shares rise 4.49% premarket.
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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