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Raytheon Technologies (RTX) Q2 Earnings Beat, Sales Fall Y/Y

Raytheon Technologies Corporation RTX second-quarter 2020 adjusted earnings per share (EPS) of 40 cents outpaced the Zacks Consensus Estimate of 10 cents by 300%.

However, the bottom-line figure declined 67.7% from the year-ago quarter’s $1.24.

Including one-time items, the company reported loss of $2.56 against earnings of $1.37 per share in the year-ago quarter.

The year-over-year deterioration in bottom line is attributable to charges related to the current economic environment primarily attributable to the COVID-19 pandemic.

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’ second-quarter sales of $14,061 million declined 24.1% on a year-over-year basis. The top line, however, beat the Zacks Consensus Estimate of $13,983 million by 0.6%.

Total costs and expenses increased 46.3% year over year to $14,720 million. The company incurred operating loss of $3,760 millionagainst operating income of $1,386 million in the year-ago quarter.

Segmental Performance

Collins Aerospace: Adjusted sales at this segment declined 35% year over year to $4,298 million in second-quarter 2020 due to commercial sales decline attributable to lower in-flight hours, aircraft fleet utilization and commercial OEM deliveries. Its adjusted operating income came in at $24 million compared with the year-ago quarter’s level of $1,293 million.

Pratt & Whitney: Adjusted sales at this segment declined 30% year over year to $3,607 million due to a significant reduction in shop visits and related spare part sales as well as lower commercial engine deliveries. Its adjusted operating loss was $151million against the year-ago quarter’s operating income of $452 million.

Raytheon Intelligence & Space: This segment recorded second-quarter adjusted sales of $3,314 million and recorded $311 million of adjusted operating profit in the quarter.

Raytheon Missiles & Defense: This unit recorded second-quarter adjusted sales of $3,590 million and $397 million of adjusted operating profit in the quarter.

Financial Update

Raytheon Technologies ended Jun 30, 2020 with cash and cash equivalents of $6,975 million, up from $4,937 million as of Dec 31, 2019.

Long-term debt was $31,210 million, as of Jun 30, 2020, down from $37,701 million as of Dec 31, 2019.

Net cash inflow from operating activities amounted to $1,342 million at the end of second-quarter 2020 compared with $2,769 million in the year-ago period.

Its free cash flow came in at $559 million compared with $2,091 million at the end of second-quarter 2019.

Zacks Rank

Raytheon Technologies currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Teledyne Technologies TDY reported second-quarter 2020 adjusted earnings of $2.43 per share, which surpassed the Zacks Consensus Estimate of $2.01 by 20.9%.

Lockheed Martin LMT reported second-quarter 2020 adjusted earnings of $6.13 per share, which surpassed the Zacks Consensus Estimate of $5.71 by 7.4%.

Hexcel Corporation HXL reported second-quarter 2020 adjusted earnings of 8 cents per share, which missed the Zacks Consensus Estimate of 20 cents by 60%.

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