10-QPeriod: Q3 FY2021

RTX Corp Quarterly Report for Q3 Ended Sep 30, 2021

Filed October 26, 2021For Securities:RTX

Summary

Raytheon Technologies Corporation (RTX) reported strong results for the third quarter of 2021, showcasing a significant recovery and growth compared to the same period in the previous year, which was heavily impacted by the COVID-19 pandemic. Total net sales increased by 10% year-over-year to $16.2 billion, driven by robust performance across its key segments, particularly Pratt & Whitney and Collins Aerospace. The company's operating profit saw a substantial rise to $1.3 billion, a significant improvement from the $434 million reported in Q3 2020, reflecting improved commercial aerospace demand and favorable contract adjustments. The company's defense segments, Raytheon Intelligence & Space (RIS) and Raytheon Missiles & Defense (RMD), also demonstrated solid growth in sales and operating profit. RTX continues to benefit from its diversified portfolio, which provides resilience against sector-specific downturns. The company is also actively managing its capital, demonstrated by share repurchases and dividend payments, signaling confidence in its future financial health and commitment to returning value to shareholders.

Financial Highlights

52 data points
Beta

Revenue

$16.21B

Net Income

$1.39B

8.6% Net Margin

EPS (Diluted)

$0.93

Total Assets

$158.77B

Cash & Equivalents

$7.48B

Free Cash Flow

$1.93B

Financial Statements
Beta
Revenue$16.21B
R&D Expenses$676.00M
SG&A Expenses$1.23B
Operating Expenses$14.99B
Operating Income$1.34B
Interest Expense$358.00M
Net Income$1.39B
EPS (Basic)$0.93
EPS (Diluted)$0.93
Shares Outstanding (Basic)1.50B
Shares Outstanding (Diluted)1.51B

Key Highlights

  • 1Total net sales increased to $16.2 billion in Q3 2021, up from $14.7 billion in Q3 2020, a 10% increase, indicating a strong recovery in commercial aerospace and continued strength in defense.
  • 2Operating profit surged to $1.3 billion in Q3 2021, a substantial increase from $434 million in Q3 2020, demonstrating improved operational efficiency and favorable business conditions.
  • 3Pratt & Whitney segment saw a significant 35% increase in net sales, driven by a rebound in commercial aftermarket and OEM sales, alongside favorable contract adjustments.
  • 4Collins Aerospace segment reported a 7% increase in net sales, primarily attributed to the recovery in commercial aerospace aftermarket demand.
  • 5Raytheon Missiles & Defense (RMD) and Raytheon Intelligence & Space (RIS) segments both reported healthy sales and operating profit growth, underscoring the strength of the defense business.
  • 6Diluted earnings per share from continuing operations improved significantly to $0.93 in Q3 2021, compared to $0.10 in Q3 2020.
  • 7The company repurchased approximately $2.0 billion of common stock during the nine months ended September 30, 2021, and paid dividends totaling $2.2 billion, reflecting a commitment to shareholder returns.

Frequently Asked Questions

The primary drivers for the substantial increase in net sales and operating profit were the recovery in the commercial aerospace sector, leading to higher demand for Pratt & Whitney's aftermarket and OEM services, and favorable contract adjustments. Additionally, the defense segments (RIS and RMD) continued to perform strongly.

While the company is still recovering from the pandemic's impact, Q3 2021 showed significant improvement, with commercial aerospace demand increasing. RTX expects continued recovery but notes that the timing and extent may be influenced by factors like vaccine efficacy, variants, and ongoing travel restrictions. The defense segments were less impacted and remain strong.

RTX demonstrated a strong commitment to shareholder returns by repurchasing approximately $2.0 billion of common stock and paying dividends totaling $2.2 billion during the first nine months of 2021. This indicates management's confidence in the company's financial position and future cash flow generation.