Raytheon Stock Falls As Q3 Sales Miss Consensus, Settles Near Low-End FY21 Sales Outlook

Raytheon Stock Falls As Q3 Sales Miss Consensus, Settles Near Low-End FY21 Sales Outlook
  • Raytheon Technologies Corp RTX reported third-quarter FY21 sales growth of 10% year-over-year to $16.21 billion, missing the consensus of $16.36 billion.
  • Collins Aerospace adjusted sales of $4.59 billion (+7% Y/Y) and adjusted operating margin expanded by 880 bps to 10.5%.
  • Pratt & Whitney adjusted sales of $4.73 billion (+25% Y/Y) and adjusted operating margin of 4%, up by 510 bps.
  • Raytheon Intelligence & Space adjusted sales flat at $3.74 billion and adjusted operating margin of 10.5%, up by 120 bps.
  • Raytheon Missiles & Defense adjusted sales totaled $3.9 billion (+7% Y/Y), and the adjusted operating margin was 12.6%, up by 80 bps.
  • Adjusted EPS improved to $1.26 compared to $0.56 in 3Q20, beating the consensus of $1.08.
  • Adjusted segment operating profit margin improved to 9.1%, compared to 5.2% in 3Q20. The total adjusted operating profit increased by 68.7% Y/Y to $1.95 billion, and the margin expanded by around 431 bps to 12%.
  • Raytheon generated cash from operating activities year-to-date of $3.98 billion, compared to $2.96 billion a year ago. Free cash flow of $2.8 billion.
  • Raytheon's backlog at the end of the quarter was $156.1 billion, of which $91.1 billion was from commercial aerospace and $65.0 billion was from defense.
  • FY21 Outlook: Raytheon expects Sales of ~$64.5 billion (prior expectation $64.4 billion - $65.4 billion) vs. consensus of $65.17 billion; Adjusted EPS of $4.10 - $4.20 (prior $3.85 - $4.00) vs. consensus of $4.07; and Free cash flow of ~$5 billion, (prior $4.5 billion - $5.0 billion).
  • Price Action: RTX shares are trading lower by 3.20% at $88.37 on the last check Tuesday.

Posted In: Briefswhy it's movingEarningsNewsGuidanceMoversTrading Ideas