Summary
Raytheon Technologies Corporation (RTX) reported its first quarter 2020 results, a period significantly impacted by the early stages of the COVID-19 pandemic and major corporate transformations. Despite a reported net loss attributable to common shareholders of $(83) million, or $(0.10) per diluted share, this quarter was dominated by the completion of the Separation Transactions (splitting off Carrier and Otis) and the Raytheon Merger, which closed on April 3, 2020, immediately after the reporting period. The financial statements for the quarter *include* the results of Otis and Carrier but *do not include* Raytheon Company's results, as the merger occurred post-period. Pro forma data suggests the combined entity would have generated $1.76 billion in net income attributable to common shareholders on $18.45 billion in net sales for the quarter, indicating the significant scale and profitability of the combined RTX. While the pandemic's impact on commercial aerospace was beginning to be felt, it had not yet materially affected the Q1 operating results. However, management warned of significant future impacts, particularly on the aerospace businesses, starting in the second quarter of 2020, leading to cost-cutting measures and reduced capital expenditures.
Financial Highlights
52 data points| Revenue | $11.36B |
| Gross Profit | $2.79B |
| R&D Expenses | $535.00M |
| SG&A Expenses | $977.00M |
| Operating Expenses | $10.08B |
| Operating Income | $1.29B |
| Interest Expense | $332.00M |
| Net Income | -$83.00M |
| EPS (Basic) | $-0.10 |
| EPS (Diluted) | $-0.10 |
| Shares Outstanding (Basic) | 858.40M |
| Shares Outstanding (Diluted) | 865.80M |
Key Highlights
- 1Net loss attributable to common shareholders of $(83) million ($0.10) per diluted share for Q1 2020, compared to net income of $1,346 million ($1.58) per diluted share in Q1 2019.
- 2Significant corporate restructuring: Completion of Separation Transactions (spinning off Carrier and Otis) and the Raytheon Merger occurred in early April 2020, immediately after the reporting period.
- 3Pro forma net sales of $18.45 billion for Q1 2020 (representing the combined RTX entity excluding Carrier and Otis) and pro forma net income attributable to common shareholders of $1.76 billion.
- 4Total assets stood at $139.57 billion and total liabilities at $97.54 billion as of March 31, 2020.
- 5Operating cash flow was $661 million for Q1 2020, a decrease from $1,500 million in Q1 2019, impacted by working capital changes and separation costs.
- 6Total debt increased significantly to $46.3 billion at March 31, 2020, partly due to debt issued by Otis and Carrier to fund the Raytheon Merger and related transactions.
- 7The company noted that while COVID-19 did not significantly impact Q1 operating results, future impacts, especially on aerospace businesses, were expected to be significant starting in Q2 2020, leading to mitigation efforts.