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Why Is Raytheon Technologies (RTX) Up 3.7% Since Last Earnings Report?
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It has been about a month since the last earnings report for Raytheon Technologies (RTX - Free Report) . Shares have added about 3.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Raytheon Technologies due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Raytheon Technologies Q4 Earnings Top, Sales Miss
Raytheon's fourth-quarter 2021 adjusted earnings per share (EPS) of $1.08 beat the Zacks Consensus Estimate of $1.01 by 6.9%. Moreover, the bottom-line figure improved 46% from the year-ago quarter’s adjusted earnings of 74 cents.
Including one-time items, the company reported GAAP earnings of 46 cents compared with 10 cents per share recorded in the year-ago quarter.
The year-over-year improvement in the bottom line was attributable to higher year-over-year revenues as well as operating profit generated in the reported quarter.
The company reported an adjusted EPS of $4.27 for full-year 2021, which improved 56% from 2020. Full-year earnings exceeded the Zacks Consensus Estimate of $4.19 by 1.9%.
Operational Performance
Raytheon Technologies’ fourth-quarter sales of $17,044 million missed the Zacks Consensus Estimate of $17,215 million by 1%. The sales figure, however, rose 4% from $16,419 million recorded in the year-ago quarter.
During full-year 2021, the company generated sales worth $64.39 billion, up 14% from the year-ago figure. Full-year sales missed the Zacks Consensus Estimate of $64.60 billion by a whisker.
Total costs and expenses dropped 4.6% year over year to $13,616 million. The company generated an operating profit of $1,320 million compared with $142 million in the year-ago quarter.
Segmental Performance
Collins Aerospace: Sales at this segment improved 13% year over year to $4,942 million in fourth-quarter 2021 due to higher commercial aftermarket as well as commercial OEM sales.
Its adjusted operating income came in at $469 million compared with the year-ago quarter’s level of $89 million.
Pratt & Whitney: Sales at this segment rose 15% year over year to $5,115 million, driven by growth in the commercial aftermarket as well as commercial OEM businesses.
Its adjusted operating profit was $162 million against the year-ago quarter’s operating profit of $105 million.
Raytheon Intelligence & Space: This segment recorded fourth-quarter sales of $3,870 million, which slipped 2% year over year. Its operating profit was $400 million, up 11%.
Raytheon Missiles & Defense: This unit recorded sales of $3,859 million, down 8% year over year. The unit recorded $486 million of operating profit in the fourth quarter, down 16%.
Financial Update
Raytheon Technologies had cash and cash equivalents of $7,832 million as of Dec 31, 2021, compared with $8,802 million as of Dec 31, 2020.
Long-term debt was $31,327 million, as of Dec 31, 2021, up from $31,026 million as of Dec 31, 2020.
Net cash inflow from operating activities amounted to $7,142 million at the end of 2021 compared with $4,334 million at the end of 2020.
Its free cash flow was $5,008 million at the end of 2021 compared with $2,539 million at the end of 2020.
Guidance
Raytheon Technologies provided its financial guidance for 2022.
The company currently projects adjusted EPS in the range of $4.60-$4.80. The Zacks Consensus Estimate for Raytheon’s 2021 EPS, pegged at $4.90, lies above the company’s guided range.
The company currently expects to record revenues in the range of $68.5-$69.5 billion. The Zacks Consensus Estimate for revenues, pegged at $69.79 billion, lies above the company’s new guidance.
The company currently expects to generate free cash flow worth approximately $6 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Raytheon Technologies has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision has been net zero. It's no surprise Raytheon Technologies has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Raytheon Technologies (RTX) Up 3.7% Since Last Earnings Report?
It has been about a month since the last earnings report for Raytheon Technologies (RTX - Free Report) . Shares have added about 3.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Raytheon Technologies due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Raytheon Technologies Q4 Earnings Top, Sales Miss
Raytheon's fourth-quarter 2021 adjusted earnings per share (EPS) of $1.08 beat the Zacks Consensus Estimate of $1.01 by 6.9%. Moreover, the bottom-line figure improved 46% from the year-ago quarter’s adjusted earnings of 74 cents.
Including one-time items, the company reported GAAP earnings of 46 cents compared with 10 cents per share recorded in the year-ago quarter.
The year-over-year improvement in the bottom line was attributable to higher year-over-year revenues as well as operating profit generated in the reported quarter.
The company reported an adjusted EPS of $4.27 for full-year 2021, which improved 56% from 2020. Full-year earnings exceeded the Zacks Consensus Estimate of $4.19 by 1.9%.
Operational Performance
Raytheon Technologies’ fourth-quarter sales of $17,044 million missed the Zacks Consensus Estimate of $17,215 million by 1%. The sales figure, however, rose 4% from $16,419 million recorded in the year-ago quarter.
During full-year 2021, the company generated sales worth $64.39 billion, up 14% from the year-ago figure. Full-year sales missed the Zacks Consensus Estimate of $64.60 billion by a whisker.
Total costs and expenses dropped 4.6% year over year to $13,616 million. The company generated an operating profit of $1,320 million compared with $142 million in the year-ago quarter.
Segmental Performance
Collins Aerospace: Sales at this segment improved 13% year over year to $4,942 million in fourth-quarter 2021 due to higher commercial aftermarket as well as commercial OEM sales.
Its adjusted operating income came in at $469 million compared with the year-ago quarter’s level of $89 million.
Pratt & Whitney: Sales at this segment rose 15% year over year to $5,115 million, driven by growth in the commercial aftermarket as well as commercial OEM businesses.
Its adjusted operating profit was $162 million against the year-ago quarter’s operating profit of $105 million.
Raytheon Intelligence & Space: This segment recorded fourth-quarter sales of $3,870 million, which slipped 2% year over year. Its operating profit was $400 million, up 11%.
Raytheon Missiles & Defense: This unit recorded sales of $3,859 million, down 8% year over year. The unit recorded $486 million of operating profit in the fourth quarter, down 16%.
Financial Update
Raytheon Technologies had cash and cash equivalents of $7,832 million as of Dec 31, 2021, compared with $8,802 million as of Dec 31, 2020.
Long-term debt was $31,327 million, as of Dec 31, 2021, up from $31,026 million as of Dec 31, 2020.
Net cash inflow from operating activities amounted to $7,142 million at the end of 2021 compared with $4,334 million at the end of 2020.
Its free cash flow was $5,008 million at the end of 2021 compared with $2,539 million at the end of 2020.
Guidance
Raytheon Technologies provided its financial guidance for 2022.
The company currently projects adjusted EPS in the range of $4.60-$4.80. The Zacks Consensus Estimate for Raytheon’s 2021 EPS, pegged at $4.90, lies above the company’s guided range.
The company currently expects to record revenues in the range of $68.5-$69.5 billion. The Zacks Consensus Estimate for revenues, pegged at $69.79 billion, lies above the company’s new guidance.
The company currently expects to generate free cash flow worth approximately $6 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Raytheon Technologies has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision has been net zero. It's no surprise Raytheon Technologies has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.