On July 25, 2024, RTX Corp (RTX, Financial) released its 8-K filing detailing its second quarter 2024 financial results. RTX Corp, a diversified aerospace and defense industrial company, reported mixed results with earnings per share (EPS) falling short of analyst estimates while revenue surpassed expectations.
Company Overview
RTX Corp (RTX, Financial) is a leading aerospace and defense company formed from the merger of United Technologies and Raytheon. The company operates through three primary segments: Collins Aerospace, Pratt & Whitney, and Raytheon. Collins Aerospace is a diversified aerospace supplier, Pratt & Whitney manufactures aircraft engines, and Raytheon provides a mix of defense technologies including missiles, missile defense systems, sensors, and communications technology.
Q2 2024 Financial Performance
RTX Corp reported second quarter sales of $19.7 billion, an 8% increase compared to the same period last year. Adjusted sales were $19.8 billion, also reflecting an 8% year-over-year growth. However, the company's GAAP EPS was $0.08, significantly lower than the prior year's $0.90, primarily due to acquisition accounting adjustments and charges related to legacy legal matters and restructuring. Adjusted EPS stood at $1.41, up 9% from the previous year.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Reported Sales | $19.7 billion | $18.3 billion | 8% |
| Net Income | $111 million | $1.3 billion | (92%) |
| GAAP EPS | $0.08 | $0.90 | (91%) |
| Adjusted EPS | $1.41 | $1.29 | 9% |
| Operating Cash Flow | $2.7 billion | $719 million | 276% |
| Free Cash Flow | $2.2 billion | $193 million | 1039% |
Segment Performance
Collins Aerospace reported sales of $6.999 billion, a 10% increase from the previous year, driven by higher commercial aftermarket and OEM sales. The segment's operating profit rose by 24% to $1.118 billion.
Pratt & Whitney saw a 19% increase in sales to $6.802 billion, with significant growth in commercial OE and military sales. The segment's operating profit surged by 136% to $542 million.
Raytheon reported a 3% decline in sales to $6.511 billion, primarily due to the divestiture of its Cybersecurity, Intelligence, and Services business. However, adjusted operating profit increased by 7% to $709 million.
Challenges and Legal Matters
RTX Corp faced several challenges, including a $918 million charge related to the resolution of legacy legal matters. This included settlements with the Department of Justice and the Securities and Exchange Commission over improper payments and defective pricing claims. These charges significantly impacted the company's GAAP EPS.
Outlook for 2024
RTX Corp has updated its full-year 2024 outlook, raising its adjusted sales forecast to $78.75 - $79.5 billion and adjusted EPS to $5.35 - $5.45. However, the company revised its free cash flow estimate down to approximately $4.7 billion from $5.7 billion.
"RTX delivered strong operational performance in the second quarter, with 10 percent organic sales growth, adjusted margin expansion across all three segments and $2.2 billion in free cash flow," said RTX President and CEO Chris Calio. "The strength in our end markets and first half performance give us the confidence to increase our outlook for adjusted sales and adjusted EPS for the full year."
For more detailed information, readers can access the full 8-K filing.
Explore the complete 8-K earnings release (here) from RTX Corp for further details.
