Raytheon Technologies reported its first quarter earnings, and beat Wall Street estimates. The company reported revenues of $19.3 billion in the first quarter with earnings per share of $1.34. Sales were up organically 12% year over year, with a 10% increase in adjusted segment operating profit growth.
Commercial OEM sales were up 33% year-over-year, with commercial after market sales up 11%. Collins was up 14% and Pratt & Whitney
up 9%. Defense sales were up 7%, and RTX overall backlog grew with a book to bill of 1.34 in the first quarter.
The three business units reported 1Q sales of $6.673 billion for Collins, up 9% $6.456 for Pratt & Whitney, up 23% and $6.659 for Raytheon, up 6%. The company is holding to its full year guidance of $78-79 billion in sales, with adjusted EPS of $5.25-5.40 and approximately $5.7 billion in free cash flow.
The GTF issue is of primary concern to investors, and the company reports that the process is working to plan. New engine deliveries being made have full life components, and the MRO process, which will run through 2026, is progressing to plan. Today there are circa 565 engines in MRO, which is close to peak volume as the plan is being executed. From intake to output, the company is realistically planning 300 days, given MRO constraints, and customer compensation is also on track to plans.
The company gained Icelandair as a new customer in the first quarter for 35 aircraft, and booked more than 200 orders and commitments from customers in the first quarter, including Breeze, Cebu Pacific, JetSmart and VietJet.
Collins is exposed to the ramp-up issues at Boeing, which are impacting both the 737 MAX and 787 programs. The company is working closely with Boeing to coordinate supply activities appropriately, and expects Boeing rates to recover later this year.
The defense business had a book to bill of 1.23 in Q1, including $1.6 billion in classified bookings, and $1.2 billion in the Patriot system for Germany. The company is also well positioned for future business resulting from the recent funding bills for Ukraine and Israel who need replenishment of their systems.
The Bottom Line
Overall, the first quarter was favorable for RTX, and the news that the GTF recall is progressing as planned is reassuring that the engine is moving towards operational maturity when the current program concludes in 2026.
Raytheon Technologies reported its first quarter earnings, and beat Wall Street estimates. The company reported revenues of $19.3 billion in the first quarter with earnings per share of $1.34. Sales were up organically 12% year over year, with a 10% increase in adjusted segment operating profit growth.
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