Raytheon Technologies Corp. on Tuesday reported higher fourth-quarter revenue and profits and said it would realign its business units by mid-year.
The planned realignment would reduce the number of Raytheon’s business segments to three: its existing Collins Aerospace and Pratt & Whitney units and a unit known simply as Raytheon, likely including Tucson-based Raytheon Missiles & Defense and its Virginia-based Raytheon Intelligence and Space unit.
The Arlington, Virginia-based parent company posted fourth-quarter net income of $1.42 billion, up 108% from the prior year, as revenue rose 6% to $18.1 billion.
Adjusted for non-recurring costs, earnings of $1.8 billion came to $1.27 per share, topping the average estimate of $1.24 per share of analysts polled by Zacks Investment Research, while revenue was slightly short of expectations.
Raytheon Missiles & Defense reported fourth-quarter sales of $4.1 billion, up 6% from the same quarter in 2022 mainly due to higher net sales on Navy programs, including its SPY-6 radar, and missile-defense programs including development of the Next Generation Interceptor, and advanced-technology projects.
RM&D recorded adjusted operating profit of $418 million, down 14% versus the prior year mainly due to program mix and lower net program efficiencies, partially offset by higher sales volume.
Fourth-quarter sales at the Virginia-based Raytheon Intelligence & Space unit fell 8% to $3.54 billion, while operating profit dropped 56% to $278 million, driven by the impact of the prior year’s divestiture of its Global Training and Services business and lower sales across several program areas.
Meanwhile, Raytheon’s Collins Aerospace unit posted a 15% increase in sales compared with fourth-quarter 2022, while operating profit rose nearly 60% as commercial air traffic continued to recover in the wake of the COVID-19 pandemic.
Engine maker Pratt & Whitney reported a 10% increase in quarterly sales and nearly doubled its adjusted operating income.
For the full year, Raytheon reported profit of $5.2 billion, or $3.50 per share, on revenue of $67 billion.
Raytheon said it is on track to surpass goals related to its 2020 merger with United Technologies Corp., and the planned business segment realignment will strengthen its market position.
“By more fully leveraging our scale, we will deliver enhanced customer solutions and unlock cost savings opportunities with improved resource allocation and a streamlined footprint,” said Raytheon Technologies President and Chief Operating Officer Christopher Calio.
Raytheon Missiles & Defense was formed following the merger with United Technologies to include the former Raytheon Missile Systems and Integrated Defense Systems business units.
While further details on the realignment were not available, Raytheon said that Roy Azevedo, president of Raytheon Intelligence & Space, will retire from that role and serve as an advisor to Calio on the business realignment.
Several weapon systems made by Tucson-based Raytheon Missiles & Defense are helping Ukraine fend off Russia's invasion.
