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Raytheon Technologies' (RTX) Q1 Earnings Beat, Sales Miss

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Raytheon Technologies Corporation’s RTX first-quarter 2021 adjusted earnings per share (EPS) of 90 cents outpaced the Zacks Consensus Estimate of 88 cents by 2.3%. However, the bottom-line figure declined 32.3% from the year-ago quarter’s adjusted earnings of $1.33.

Including one-time items, the company reported GAAP earnings of 51 cents compared with 50 cents per share in the year-ago quarter.

The year-over-year improvement in the bottom line is attributable to higher year-over-year revenues generated in the reported quarter.

Raytheon Technologies Corporation Price, Consensus and EPS Surprise

Raytheon Technologies Corporation Price, Consensus and EPS Surprise
Raytheon Technologies Corporation Price, Consensus and EPS Surprise

Raytheon Technologies Corporation price-consensus-eps-surprise-chart | Raytheon Technologies Corporation Quote

Operational Performance

Raytheon Technologies’ first-quarter sales of $15,251 million missed the Zacks Consensus Estimate of $15,379 million by 0.8%. The sales figure however increased 34.3% from $11,360 million recorded in the year-ago quarter.

Total costs and expenses increased 42.3% year over year to $14,346 million. The company generated operating profit of $1,013 million compared with $1.295 million in the year-ago quarter.

Segmental Performance

Collins Aerospace: Adjusted sales at this segment plunged 32% year over year to $4,370 million in first-quarter 2021 due to lower commercial OEM sales, military sales as well as commercial aftermarket sales.
Its adjusted operating income came in at $314 million compared with the year-ago quarter’s level of $1,246 million.

Pratt & Whitney: Adjusted sales at this segment declined 24% year over year to $4,030 million due to a significant reduction in shop visits and related spare part sales as well as lower commercial engine deliveries.
Its adjusted operating profit was $20 million compared with the year-ago quarter’s operating income of $475 million.

Raytheon Intelligence & Space: This segment recorded first-quarter sales of $3,765 million and generated $388 million of adjusted operating profit.

Raytheon Missiles & Defense: This unit recorded sales of $3,793 million and $496 million of adjusted operating profit in the quarter.

Financial Update

Raytheon Technologies had cash and cash equivalents of $8,579 million as of Mar 31, 2021 , compared with $8,802 million as of Dec 31, 2020.

Long-term debt was $29,935 million, as of Mar 31, 2021, down from $31,026 million as of Dec 31, 2020.

Net cash inflow from operating activities amounted to $723 million at the end of first-quarter 2021 compared with $1,132 million at the end of first-quarter 2020.

Its free cash flow was $336 million compared with $807 million at the end of first-quarter 2020.

Guidance

Raytheon Technologies has raised the lower end of its revenue and earnings view for 2021.

The company currently projects to generate EPS in the range of $3.50-$3.70, compared with the earlier guidance of $3.40-$3.70. The Zacks Consensus Estimate for EPS, pegged at $3.64, lies above the mid-point of the newly guided range.

The company currently expects to record revenues in the band of $63.9-$65.4 billion, compared with the prior guidance of $63.4-$65.4 billion. The Zacks Consensus Estimate for revenues, pegged at $65.13 billion, is higher than the mid-point of the guided range.

The company continues to expect to generate free cash flow worth $4.5 billion during 2021.

Zacks Rank

Raytheon Technologies currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Lockheed Martin LMT reported first-quarter 2021 earnings of $6.56 per share, which surpassed the Zacks Consensus Estimate of $6.32 by 3.8%. The bottom line also improved 7.9% from the year-ago quarter’s $6.08.

Hexcel Corporation HXL reported first-quarter 2021 loss of 10 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 16 cents.

Upcoming Defense Releases

General Dynamics GD is scheduled to report first-quarter 2021 results on Apr 28.

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General Dynamics Corporation (GD) : Free Stock Analysis Report

Lockheed Martin Corporation (LMT) : Free Stock Analysis Report

Hexcel Corporation (HXL) : Free Stock Analysis Report

Raytheon Technologies Corporation (RTX) : Free Stock Analysis Report

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