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Raytheon Technologies (RTX) Q3 Earnings Beat, Sales Miss

Raytheon Technologies Corporation RTX third-quarter 2020 adjusted earnings per share (EPS) of 58 cents outpaced the Zacks Consensus Estimate of 48 cents by 20.8%. However, the bottom-line figure declined 54.3% from the year-ago quarter’s adjusted earnings of $1.27.

Including one-time items, the company reported GAAP earnings of 10 cents compared with earnings of $1.11 per share in the year-ago quarter.

The year-over-year deterioration in the bottom line is attributable to charges related to the current economic environment, primarily attributable to the COVID-19 pandemic along with some restructuring costs.

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’ third-quarter adjusted sales amounted to $15,047 million, while the company’s GAAP sales came in at $14,747 million. The company’s GAAP sales figure missed the Zacks Consensus Estimate of $15,132 million by 2.5%.

The company had reported GAAP sales worth $11,373 million in the year-ago quarter.

Total costs and expenses increased 50.4% year over year to $15,047 million. The company generated operating profit of $434 million compared with $1,430 million in the year-ago quarter.

Segmental Performance

Collins Aerospace: Adjusted sales at this segment declined 34% year over year to $4,278 million in third-quarter 2020 due to commercial sales decline attributable to lower in-flight hours, aircraft fleet utilization and commercial OEM deliveries. Impact of the 737 MAX grounding and lower ADS-B mandate volume also caused sales decline. Its adjusted operating income came in at $73 million compared with the year-ago quarter’s level of $1,286 million.

Pratt & Whitney: Adjusted sales at this segment declined 28% year over year to $3,494 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 $43 million against the year-ago quarter’s operating income of $520 million.

Raytheon Intelligence & Space: This segment recorded third-quarter adjusted sales of $3,674 million and recorded $348 million of adjusted operating profit in the quarter.

Raytheon Missiles & Defense: This unit recorded third-quarter adjusted sales of $3,794 million and $453 million of adjusted operating profit in the quarter.

Financial Update

Raytheon Technologies ended Sep 30, 2020 with cash and cash equivalents of $10,001 million, up from $4,937 million as of Dec 31, 2019.

Long-term debt was $31,246 million, as of Sep 30, 2020, down from $37,701 million as of Dec 31, 2019.

Net cash inflow from operating activities amounted to $2,964 million at the end of third-quarter 2020 compared with $4,496 million in the year-ago period.

Its free cash flow was $1,792 million compared with $3,374 million at the end of third-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

Lockheed Martin LMT reported third-quarter 2020 earnings from continuing operations of $6.25 per share, which surpassed the Zacks Consensus Estimate of $6.07 by 3%.

Hexcel Corporation HXL reported third-quarter 2020 loss of 29 cents per share against the Zacks Consensus Estimate of earnings of 7 cents. The bottom line also declined from the prior-year quarter’s earnings per share of 90 cents.

Teledyne Technologies TDY reported third-quarter 2020 adjusted earnings of $2.48 per share, which surpassed the Zacks Consensus Estimate of $2.40 by 3.3%.

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