30 ET.
Strong commercial sales
In my observation, RTX emerged as a result of the amalgamation between Raytheon, a defense-oriented entity, and the predominantly commercial aerospace sector of United Technologies. During the second quarter, it reported earnings of $1.56 per share, surpassing the expected Wall Street average of $1.43 per share on sales of $20.6 billion. Remarkably, this revenue figure represents a 9% year-on-year increase, primarily fueled by robust double-digit growth in the commercial sector.
Commercial aerospace firms such as RTX, among others, are experiencing increased benefits due to the delays in introducing new airplanes to the market. Consequently, there’s been a surge in demand for replacement parts. In their latest quarter, Pratt & Whitney, one of the company’s businesses, saw a 19% rise in sales from aircraft engines, and their defense sector also experienced a 6% growth.
The main point at hand revolves around forecasts. Management significantly increased their projected total annual sales by approximately $2 billion, now ranging from $84.75 billion to $85.5 billion, which surpasses the previously expected $84.3 billion. However, the anticipated earnings per share have been scaled down. The new range is set at $5.80 to $5.95, as opposed to the initial $6 to $6.15, due to increased tariff costs and revised tax estimates.
Is RTX stock a buy?
The updated earnings prediction shouldn’t have taken anyone by surprise, given that RTX had earlier indicated a potential $0.50 per share impact from tariffs in their initial estimate. The revised guidance aims for greater accuracy, factoring in the tariff effect in their future projection.
In simpler terms, Pratt & Whitney is a highly successful company, and it has a large number of orders for commercial planes that last until the end of this decade. This means there’s plenty of room for increased sales in the future. When looking at RTX stock, investors should not focus too much on the adjustment to the guidance.
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2025-07-22 21:09