10-QPeriod: Q2 FY2021

RTX Corp Quarterly Report for Q2 Ended Jun 30, 2021

Filed July 27, 2021For Securities:RTX

Summary

Raytheon Technologies Corporation (RTX) reported a significant increase in net sales for the second quarter of 2021, reaching $15.88 billion, a rise of approximately 13% compared to $14.06 billion in the same quarter of the prior year. This growth was driven by a recovery in commercial aerospace demand, particularly in aftermarket sales and engine deliveries at Pratt & Whitney, and increased commercial aerospace OEM sales at Collins Aerospace. The defense segments (RIS and RMD) also contributed positively with robust bookings and sales growth. While the company saw improved top-line performance, the net income from continuing operations attributable to common shareholders was $1.04 billion for the quarter, a notable improvement from the $3.84 billion loss in the prior year, largely due to the absence of a significant goodwill impairment charge recognized in Q2 2020. The company's balance sheet remains solid with total assets of $158.8 billion. RTX continues to manage its debt effectively and maintained its total debt to total capitalization ratio at 30%. The company is navigating the ongoing impacts of the COVID-19 pandemic, expecting continued recovery in commercial aerospace but acknowledging potential lingering effects through 2023 or 2024.

Financial Highlights

51 data points
Beta

Revenue

$15.88B

Net Income

$1.03B

6.5% Net Margin

EPS (Diluted)

$0.68

Total Assets

$158.84B

Cash & Equivalents

$8.05B

Free Cash Flow

$1.33B

Financial Statements
Beta
Revenue$15.88B
R&D Expenses$657.00M
SG&A Expenses$1.37B
Operating Expenses$14.68B
Operating Income$1.28B
Interest Expense$342.00M
Net Income$1.03B
EPS (Basic)$0.69
EPS (Diluted)$0.68
Shares Outstanding (Basic)1.51B
Shares Outstanding (Diluted)1.51B

Key Highlights

  • 1Total net sales increased to $15.88 billion in Q2 2021, up 13% year-over-year, driven by recovery in commercial aerospace and strong defense performance.
  • 2Net income from continuing operations attributable to common shareholders improved to $1.04 billion, a significant turnaround from a $3.84 billion loss in Q2 2020.
  • 3Pratt & Whitney and Collins Aerospace saw sales growth, primarily from commercial aftermarket and OEM demand, reflecting the ongoing recovery in air travel.
  • 4Defense segments, Raytheon Intelligence & Space (RIS) and Raytheon Missiles & Defense (RMD), showed strong sales and bookings growth, with significant contributions from programs like Patriot and StormBreaker.
  • 5The company reported $2.05 billion in cash flow from operations for the six months ended June 30, 2021, indicating healthy operational cash generation.
  • 6Total backlog remained strong at $151.8 billion as of June 30, 2021, providing good visibility for future revenue.
  • 7The company continues to manage its debt prudently, with total debt to total capitalization at 30%.

Frequently Asked Questions

The increase in sales was primarily driven by the recovery in the commercial aerospace sector, with higher commercial aftermarket sales and engine deliveries at Pratt & Whitney, and increased commercial aerospace OEM sales at Collins Aerospace. Additionally, the defense segments (RIS and RMD) contributed with strong sales performance and new bookings.

Profitability significantly improved. Net income from continuing operations attributable to common shareholders was $1.04 billion, a substantial improvement from a net loss of $3.84 billion in the second quarter of 2020. This was largely due to the absence of a substantial goodwill impairment charge that impacted the prior year's results, combined with improved operational performance.

The company expects continued negative impacts on its commercial aerospace businesses (Collins Aerospace and Pratt & Whitney) compared to pre-COVID-19 levels, although it is seeing indications of recovery. A full recovery to pre-COVID-19 levels is estimated to occur in 2023 or 2024, depending on various factors related to the pandemic and air travel trends.

Raytheon Technologies maintains a solid financial position with $8.1 billion in cash and cash equivalents at the end of the quarter. The company's total debt to total capitalization ratio remained stable at 30%, indicating prudent debt management. The company has access to substantial revolving credit facilities and continues to generate strong operating cash flows.