Parent of Tucson's Raytheon posts lower 2Q results after $1.8B in charges

Aerospace and defense giant RTX Corp. posted sharply lower second-quarter earnings after taking nearly $1.8 billion in charges for accounting adjustments and the expected cost of settling multiple government investigations.

But shares in RTX, parent of major Tucson employer Raytheon, surged Thursday after the company reported higher adjusted earnings and beat Wall Street’s expectations.

The Virginia-based company reported second-quarter net income of $111 million, or 8 cents per share, down from $1.3 billion in the second quarter of last year, as second-quarter revenue rose 8% to $19.72 billion.

The income results were cut by nearly $1.8 billion in accounting adjustments related to restructuring, legal matters and termination of a foreign contract at Raytheon, and RTX beat analysts’ estimates on an adjusted basis.

RTX said that after adjustment, earnings came to nearly $1.9 billion, or $1.41 per share, up 9% from last year and topping the average $1.29 estimate of analysts surveyed by Zacks Investment Research.

RTX second-quarter revenue also beat Wall Street’s estimate of $19.31 billion, and the company incrementally raised its financial outlook for the year.

RTX shares closed Thursday at $113.47 per share, up $8.64 or about 8.2%, on the New York Stock Exchange.

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Raytheon said one-time charges totaling $1.78 billion included the expected cost of legal settlements and a $575 million charge for the Raytheon contract termination.

The company said it expects to settle separate, previously disclosed federal criminal and civil federal probes, including one involving improper payments made by Raytheon and its joint venture, Thales-Raytheon Systems, and investigations into “defective pricing” claims for certain legacy Raytheon contracts.

By business segment, Raytheon posted second quarter 2024 reported sales of $6.5 billion, down 3% versus the prior year, as higher sales of Patriot missile systems, counter-drone systems and Stinger missiles was more than offset by the divestiture of its cybersecurity unit in the first quarter.

Raytheon reported operating profit of $127 million, down 80% versus the prior year after the $575 million contract termination charge.

Excluding adjustments for the divestiture and the contract charge, sales were up 4% and operating income was up 7% at Raytheon versus the second quarter of last year, RTX said.