RTX profit jumps 20% on aviation strength, military demand

By Thomson Reuters Apr 23, 2024 | 5:59 AM

By Pratyush Thakur and Mike Stone

(Reuters) – Aerospace and defense major RTX on Tuesday reported a 20% jump in its first-quarter profit, helped by robust commercial aftermarket business and military equipment demand.

The Arlington, Virginia-based company reported net income of $1.71 billion, or $1.28 per share, for the quarter ended March 31, compared with $1.43 billion, or 97 cents per share, a year earlier.

The aftermarket business gained as airlines had to extend the service life of aircraft to keep up with the recovery in air travel amid the limited availability of new commercial planes.

Pratt and Whitney, a subsidiary of RTX, reported a sales rise of 23% amid the ongoing inspection drive in GTF engines.

“We are making progress on … our GTF fleet management plans, which remain on track,” Chief Operating Officer Chris Calio said in a statement.

Following a quality crisis in some GTF engines last year, RTX estimated grounding of 350 jets annually from 2024 through 2026, outlining $6 billion to $7 billion in recall cost.

Driven by strong demand for both original equipment and aftermarket service, sales at RTX’s Collins Aerospace unit, which makes avionics and aerospace components, rose 9%.

Operating profit at RTX’s defense arm, Raytheon, jumped 74%, aided by its in-demand Patriot defense system, and gains from the divestiture of the cybersecurity, intelligence, and services business.

During the quarter, Raytheon booked a $1.2 billion order for Germany Patriot production.

International demand for U.S. weaponry is soaring following Russia’s invasion of Ukraine, the specter of Chinese aggression, and conflicts in the Middle East, with countries striking and negotiating new deals to buy arms and looking to speed up existing contracts.

RTX’s quarterly revenue jumped 12% to $19.3 billion.

The company reaffirmed its 2024 per-share profit forecast of $5.25 to $5.40 on sales of $78 billion to $79 billion.

(Reporting by Pratyush Thakur in Bengaluru; Editing by Maju Samuel)