10-QPeriod: Q1 FY2021

RTX Corp Quarterly Report for Q1 Ended Mar 31, 2021

Filed April 27, 2021For Securities:RTX

Summary

Raytheon Technologies Corporation (RTX) reported its first quarter 2021 financial results, showing a significant year-over-year increase in net sales, primarily driven by the acquisition of Raytheon Company. Total net sales reached $15.25 billion, up from $11.36 billion in Q1 2020. This growth was offset by lower organic sales in the Collins Aerospace and Pratt & Whitney segments, largely attributed to the continued impact of the COVID-19 pandemic on commercial air travel and related demand. While the defense segments (RIS and RMD) showed strong performance due to their inclusion post-merger, the commercial aerospace divisions experienced headwinds. Despite the sales increase, operating profit saw a decline to $1.01 billion from $1.29 billion in the prior year, impacted by lower segment margins and acquisition accounting adjustments. The company maintained a solid liquidity position with $8.58 billion in cash and cash equivalents.

Financial Highlights

52 data points
Beta

Revenue

$15.25B

Net Income

$753.00M

4.9% Net Margin

EPS (Diluted)

$0.50

Total Assets

$160.61B

Cash & Equivalents

$8.58B

Free Cash Flow

$723.00M

Financial Statements
Beta
Revenue$15.25B
R&D Expenses$589.00M
SG&A Expenses$1.22B
Operating Expenses$14.35B
Operating Income$1.01B
Interest Expense$346.00M
Net Income$753.00M
EPS (Basic)$0.50
EPS (Diluted)$0.50
Shares Outstanding (Basic)1.51B
Shares Outstanding (Diluted)1.51B

Key Highlights

  • 1Total Net Sales increased by 34.2% to $15.25 billion in Q1 2021 compared to $11.36 billion in Q1 2020, largely due to the Raytheon merger.
  • 2Organic sales decreased by $3.18 billion, with Collins Aerospace and Pratt & Whitney experiencing significant declines due to COVID-19 impacts on commercial aerospace.
  • 3Operating profit decreased by 21.8% to $1.01 billion from $1.29 billion, primarily due to lower segment operating margins and acquisition accounting adjustments.
  • 4Net income attributable to common shareholders was $753 million ($0.50 per share) in Q1 2021, a significant improvement from a net loss of $83 million ($-0.10 per share) in Q1 2020, driven by the absence of large losses from discontinued operations.
  • 5Cash flows from operating activities from continuing operations were $723 million, down from $1.13 billion in Q1 2020.
  • 6The company ended the quarter with $8.58 billion in cash and cash equivalents, maintaining a strong liquidity position.
  • 7Restructuring charges of $43 million were recorded, primarily related to workforce reductions and facility consolidations, indicating ongoing cost management efforts.

Frequently Asked Questions

The primary driver for the significant increase in Net Sales to $15.25 billion in Q1 2021, up from $11.36 billion in Q1 2020, was the completion of the Raytheon Merger on April 3, 2020. The results of the acquired Raytheon Company are now included in Raytheon Technologies' financial statements.

The COVID-19 pandemic continues to negatively impact RTX's commercial aerospace segments, Collins Aerospace and Pratt & Whitney, due to reduced air travel, leading to lower demand for aftermarket parts and services, as well as commercial OEM products. The defense segments (RIS and RMD) have experienced less significant disruptions.

While net sales increased due to the merger, operating profit decreased by 21.8% year-over-year. This was influenced by lower margins in the commercial aerospace segments, ongoing restructuring costs, and acquisition accounting adjustments. The company continues to focus on cost management and expects long-term recovery in the aerospace industry, but near-term impacts from the pandemic on commercial businesses are anticipated.

RTX maintained a strong liquidity position with $8.58 billion in cash and cash equivalents at the end of Q1 2021. The company had $6.84 billion available under its credit facilities and access to commercial paper markets. Total debt was $31.5 billion, and the debt-to-equity ratio remained stable at 30%, indicating prudent financial management.