Shares in RTX Corp. rose Tuesday after the company reported higher fourth-quarter revenue and profits on strong sales at its commercial aviation units and continuing growth at its Raytheon defense business.
The Virginia-based parent of Tucson defense contractor Raytheon posted adjusted sales of $19.9 billion in the fourth quarter, up 10% from the same period in 2022, and adjusted net income of $1.75 billion or $1.29 per share, a year-over-year increase of 2%.
Those results beat Wall Street analystsโ average estimate of $9.7 billion in adjusted revenue and earnings per share of $1.24, according to Zacks Investment Research, and RTX shares rose more than 5% in trading on the New York Stock Exchange Tuesday.
The companyโs Pratt & Whitney aircraft engine unit reported a 14% increase in fourth-quarter sales to $6.44 billion, while adjusted operating profits rose 25% to $405 million, on a 20% increase in commercial original equipment sales and an 18% increase in aftermarket sales.
RTXโs Collins Aerospace business reported fourth-quarter sales of $7.1 billion, also up 14% from the same period in 2022, while adjusted operating profit rose 22% to $1.04 billion, with commercial aftermarket sales up 23% from the same period in 2022.
Raytheon posted fourth-quarter sales of $6.9 billion, up 3% percent versus the same quarter in 2022, mainly driven by higher volume on advanced technology and air-power programs, the company said.
Raytheon recorded adjusted operating profit of $618 million, up 8% versus fourth-quarter 2022, which had included a $42 million charge related to a divestiture.
The profit increase was mainly due to higher volume and lower operating expenses, partially offset by unfavorable net program efficiencies.
Major Raytheon contract bookings in the fourth quarter included $2.8 billion for production of Patriot Guidance Enhanced Missiles (GEM-T), $1.3 billion of classified bookings; $408 million for the developmental Hypersonic Attack Cruise Missile and $343 million for StormBreaker guided bombs.
For all of 2023, RTX posted sales of $68.9 billion, up 3% percent versus prior year, reflecting the impact of charges the company took related to defective powder metal used in engines made by its Pratt & Whitney unit that led to a recall of engines used in many airliners.
In the third quarter, RTX took a $5.4 billion charge to reflect costs associated with the engine problem, which the company estimated would cost about $7 billion.
RTX posted full-year earnings per share of $2.23, down 36% from 2022, including the impact of the Pratt powder metal matter.
Without the charges, RTX reported adjusted earnings of $5.06 per share, up 6% from the prior year.
RTX issued an outlook for 2024 calling for sales of between $78 billion and $79 billion, and adjusted earnings of $5.25 to $5.40.
The company also repurchased $12.9 billion of its shares in 2023, including $10.3 billion in the fourth quarter, as it sought to return the shareholders savings realized from United Technologies Corp.โs acquisition of Raytheon Co. in 2020 to form what is now RTX.