RTX Q2 2024: Adjusted EPS Soars by 9% to $1.41

RTX (NYSE: RTX) reported a solid performance for the second quarter of 2024, showcasing significant growth in sales and operational efficiency. The company achieved reported sales of $19.7 billion, marking an 8% increase compared to the same period last year.

On an organic basis, the sales growth was even more impressive at 10%. Adjusted sales for the quarter were slightly higher at $19.8 billion, also reflecting an 8% year-over-year increase. Despite these gains, the company’s GAAP EPS took a hit, dropping to $0.08 from $0.90 in the previous year, a 91% decline.

This decrease was largely due to acquisition accounting adjustments and significant non-recurring items, including a $0.68 charge related to legacy legal matters and a $0.33 charge for a fixed-price development contract with a foreign customer at Raytheon.

On a brighter note, RTX’s adjusted EPS stood at $1.41, a 9% increase from the prior year. The company also reported a robust operating cash flow of $2.7 billion and a free cash flow of $2.2 billion. The backlog remains strong at $206 billion, split between $129 billion in commercial and $77 billion in defense. RTX also realized $120 million in incremental gross cost synergies, further bolstering its financial health.

RTX Reports $1.41 Adj. EPS for Q2, $19.8 Billion in Revenue

When compared to market expectations, RTX’s performance in Q2 2024 was a mixed bag. Analysts had projected an EPS of $1.29 and revenue of $19.28 billion. The company exceeded revenue expectations by reporting $19.8 billion, surpassing the forecast.

This revenue beat was driven by strong performance across its segments, particularly Collins Aerospace and Pratt & Whitney, which saw sales increases of 10% and 19%, respectively. Collins Aerospace benefited from a 12% rise in commercial aftermarket and a 10% increase in commercial OE, while Pratt & Whitney saw gains in both commercial and military segments.

However, the reported GAAP EPS of $0.08 fell significantly short of the expected $1.29. This discrepancy was primarily due to the aforementioned non-recurring charges and restructuring costs. Adjusted EPS, which excludes these items, came in at $1.41, comfortably beating the market expectation.

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RTX Revises Full-Year 2024 Guidance, Expects Adjusted Sales in the Range of $78.75 Billion to $79.5 Billion

RTX has revised its guidance for the full year 2024, reflecting its confidence in continued strong performance. The company now expects adjusted sales to be in the range of $78.75 billion to $79.5 billion, up from the previous guidance of $78.0 billion to $79.0 billion.

This upward revision is based on the solid first-half performance and the strength in end markets. Adjusted EPS guidance has also been increased to a range of $5.35 to $5.45, up from the prior range of $5.25 to $5.40. However, the outlook for free cash flow has been revised downward to approximately $4.7 billion from the earlier estimate of $5.7 billion.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.