RTX Corp (RTX, Financial) released its Q3 2023 earnings report on October 24, 2023. The company reported sales of $13.5 billion, reflecting a 21% decrease from the previous year due to the impact of the previously disclosed Pratt powder metal matter. However, adjusted sales were up 12% from the prior year, standing at $19.0 billion.
Financial Performance
The company reported a GAAP EPS from continuing operations loss of $0.68, which includes a $1.53 charge from the Pratt powder metal matter and $0.40 of acquisition accounting adjustments and other significant and/or non-recurring charges. Adjusted EPS was $1.25, up 3% from the prior year. Operating cash flow from continuing operations was reported at $3.3 billion, with free cash flow of $2.8 billion.
Company Backlog and Share Repurchase
The company's backlog stands at $190 billion, including $115 billion of commercial and $75 billion of defense. RTX also announced that it repurchased $1.4 billion of its shares. Furthermore, the company is proceeding with a $10 billion accelerated share repurchase program and increasing its capital return commitment through 2025 to $36 - $37 billion.
Outlook for 2023
RTX updated its outlook for the full year 2023, projecting reported sales of approximately $68.5 billion, up from $67.5 - $68.5 billion. Adjusted sales are expected to be approximately $74.0 billion, up from $73.0 - $74.0 billion. The company anticipates an adjusted EPS of $4.98 - $5.02, and free cash flow of approximately $4.8 billion, up from approximately $4.3 billion.
Segment Results
RTX reported third quarter sales of $13.5 billion, down 21% over the prior year, which included a $5.4 billion charge related to the previously disclosed Pratt powder metal matter. On an adjusted basis, sales were $19.0 billion, up 12% over the prior year. The company recorded a net loss from continuing operations attributable to common shareowners in the third quarter of $984 million, down versus the prior year which included the after-tax impact of $2.2 billion related to the previously disclosed Pratt powder metal matter, $406 million of acquisition accounting adjustments, $80 million of restructuring charges, and $96 million of other net significant and/or non-recurring charges.
Conclusion
Despite the challenges faced due to the Pratt powder metal matter, RTX Corp (RTX, Financial) has demonstrated resilience with strong commercial aftermarket growth and a significant share repurchase program. The company's updated outlook for 2023 indicates a positive trajectory for the upcoming fiscal year.
