RTX (RTX) Q3 2023 Earnings Call Transcript Summary
Raytheon Technologies Corporation (RTX) Q3 2023 Earnings Call Summary
Here are the specific viewpoints from the earnings call:
Bullish Points:
1. Air travel demand remains strong with global revenue passenger miles essentially back to 2019 levels.
2. Strong demand for holiday and business travel for the remainder of the year.
3. Elevated threat environment driving increased defense spending globally.
4. Record backlog of $190 billion with a pipeline of existing franchises and new technology developments.
5. Agreement to sell Raytheon's cyber services business and Collins actuation business, generating approximately $3 billion of gross proceeds in 2024.
6. Board approved a $10 billion accelerated share repurchase program.
7. Commitment to deliver long-term shareowner value.
8. Organic sales grew 12%, third consecutive quarter of double-digit growth.
9. Segment operating profit grew 15%.
10. Strong free cash flow of $2.8 billion in the quarter.
Bearish Points:
1. Powdered metal manufacturing quality issue at Pratt & Whitney.
2. Incremental AOGs in the first half of 2024 for PW1500 and PW1900.
3. Need to increase capacity and reduce turn times in MRO shops.
4. Recorded a $5.4 billion sales charge for the PW1100 powdered metal matter, resulting in a $2.9 billion operating profit impact.
5. Higher effective tax rate due to recent IRS guidance on R&D capitalization.
6. Raytheon's adjusted operating profit reduced from the prior range of up $125 million to $175 million to a new range of up $25 million to up $75 million versus the prior year.
7. Pension headwind expected to be about $0.45 on a year over year basis.
8. Inflation hitting some fixed price programs.
9. Challenging fixed price development contracts.
10. Inspection interval costs depressing Pratt & Whitney margins.
For more information about Raytheon Technologies Corporation's earnings call, you can read the relevant news: RTX (RTX) Q3 2023 Earnings Call Transcript
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