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RTX (RTX) Up 5.2% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for RTX (RTX - Free Report) . Shares have added about 5.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is RTX due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
RTX Q1 Earnings Surpass Estimates by 9%, Sales Increase Y/Y
RTX Corporation’s first-quarter 2024 adjusted earnings per share (EPS) of $1.34 beat the Zacks Consensus Estimate of $1.23 by 8.9%. The bottom line also improved 9.8% from the year-ago quarter’s level of $1.22.
Including one-time items, the company reported GAAP earnings of $1.28 per share compared with 97 cents in the prior-year quarter.
Operational Performance
RTX’s first-quarter net sales totaled $19,305 million, which surpassed the Zacks Consensus Estimate of $18,412.6 million by 4.8%. The top line also improved 12% from $17,214 million recorded in the first quarter of 2023.
Total costs and expenses increased 14% year over year to $17,807 million. The company generated an operating profit of $1,870 million compared with $1,687 million in the prior-year quarter.
RTX posted an adjusted operating profit of $2,292 million, up 6.5% from the year-ago quarter’s reported figure of $2,153 million.
Segmental Performance
Collins Aerospace: Sales in this segment totaled $6,673 million, up 9% year over year. This improvement can be attributed to higher commercial aftermarket and commercial OEM sales, backed by strong demand across commercial aerospace end markets. Increased defense sales driven by higher volume also benefited this unit’s sales.
The segment’s adjusted operating profit totaled $1,048 million compared with $903 million in the year-ago quarter.
Pratt & Whitney: This segment’s sales totaled $6,456 million, up 23% from the year-ago quarter’s level. The improvement was due to growth in the commercial aftermarket and commercial OEM businesses, driven by higher GTF OE volume and favorable mix, and higher aftermarket volume.Increased military sales, driven by higher sustainment volume across multiple platforms, also contributed to this unit’s sales growth.
Adjusted operating profit amounted to $430 million compared with the year-ago quarter’s level of $434 million.
Raytheon: This segment recorded first-quarter sales of $6,659 million, up 6% year over year, driven by higher sales volume from land and air defense systems, including Global Patriot, counter-UAS systems and NASAMS, and advanced technology programs.
The segment’s adjusted operating profit amounted to $630 million, up 8% from $584 million recorded in the corresponding period of 2023.
Financial Update
RTX had cash and cash equivalents of $5,607 million as of Mar 31, 2024, compared with $6,587 million as of Dec 31, 2023.
Long-term debt totaled $42,334 million as of Mar 31, 2024, up from $42,355 million as of Dec 31, 2023.
Net cash flow from operating activities was $342 million as of Mar 31, 2024, against cash outflow from operating activities of $863 million at the end of first-quarter 2023.
Free cash outflow totaled $125 million at the end of first-quarter 2024 compared with $1,383 million at the end of first-quarter 2023.
Guidance
RTX reiterated its financial guidance for 2024.
The company still projects adjusted EPS in the band of $5.25-$5.40. The Zacks Consensus Estimate for RTX’s 2024 EPS is pegged at $5.39, higher than the mid-point of the company’s guided range.
RTX continues to expect to generate sales in the band of $78-$79 billion in 2024. The Zacks Consensus Estimate for sales is pegged at $78.63 billion, which lies above the mid-point of the company’s guidance.
The company still expects free cash flow of $5.7 billion for 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, RTX has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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 these revisions looks promising. Notably, RTX has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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RTX (RTX) Up 5.2% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for RTX (RTX - Free Report) . Shares have added about 5.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is RTX due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
RTX Q1 Earnings Surpass Estimates by 9%, Sales Increase Y/Y
RTX Corporation’s first-quarter 2024 adjusted earnings per share (EPS) of $1.34 beat the Zacks Consensus Estimate of $1.23 by 8.9%. The bottom line also improved 9.8% from the year-ago quarter’s level of $1.22.
Including one-time items, the company reported GAAP earnings of $1.28 per share compared with 97 cents in the prior-year quarter.
Operational Performance
RTX’s first-quarter net sales totaled $19,305 million, which surpassed the Zacks Consensus Estimate of $18,412.6 million by 4.8%. The top line also improved 12% from $17,214 million recorded in the first quarter of 2023.
Total costs and expenses increased 14% year over year to $17,807 million. The company generated an operating profit of $1,870 million compared with $1,687 million in the prior-year quarter.
RTX posted an adjusted operating profit of $2,292 million, up 6.5% from the year-ago quarter’s reported figure of $2,153 million.
Segmental Performance
Collins Aerospace: Sales in this segment totaled $6,673 million, up 9% year over year. This improvement can be attributed to higher commercial aftermarket and commercial OEM sales, backed by strong demand across commercial aerospace end markets. Increased defense sales driven by higher volume also benefited this unit’s sales.
The segment’s adjusted operating profit totaled $1,048 million compared with $903 million in the year-ago quarter.
Pratt & Whitney: This segment’s sales totaled $6,456 million, up 23% from the year-ago quarter’s level. The improvement was due to growth in the commercial aftermarket and commercial OEM businesses, driven by higher GTF OE volume and favorable mix, and higher aftermarket volume.Increased military sales, driven by higher sustainment volume across multiple platforms, also contributed to this unit’s sales growth.
Adjusted operating profit amounted to $430 million compared with the year-ago quarter’s level of $434 million.
Raytheon: This segment recorded first-quarter sales of $6,659 million, up 6% year over year, driven by higher sales volume from land and air defense systems, including Global Patriot, counter-UAS systems and NASAMS, and advanced technology programs.
The segment’s adjusted operating profit amounted to $630 million, up 8% from $584 million recorded in the corresponding period of 2023.
Financial Update
RTX had cash and cash equivalents of $5,607 million as of Mar 31, 2024, compared with $6,587 million as of Dec 31, 2023.
Long-term debt totaled $42,334 million as of Mar 31, 2024, up from $42,355 million as of Dec 31, 2023.
Net cash flow from operating activities was $342 million as of Mar 31, 2024, against cash outflow from operating activities of $863 million at the end of first-quarter 2023.
Free cash outflow totaled $125 million at the end of first-quarter 2024 compared with $1,383 million at the end of first-quarter 2023.
Guidance
RTX reiterated its financial guidance for 2024.
The company still projects adjusted EPS in the band of $5.25-$5.40. The Zacks Consensus Estimate for RTX’s 2024 EPS is pegged at $5.39, higher than the mid-point of the company’s guided range.
RTX continues to expect to generate sales in the band of $78-$79 billion in 2024. The Zacks Consensus Estimate for sales is pegged at $78.63 billion, which lies above the mid-point of the company’s guidance.
The company still expects free cash flow of $5.7 billion for 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, RTX has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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 these revisions looks promising. Notably, RTX has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.