RTX Q4 2024: Strong Growth in Aerospace & Defense Industry

Introduction

Raytheon Technologies (RTX) has emerged as a dominant force in the aerospace and defense industry following the merger of Raytheon Company and United Technologies Corporation in 2020. The company’s Q4 2024 performance underscores its ability to leverage its diverse portfolio, which includes Collins Aerospace, Pratt & Whitney, Raytheon Missiles & Defense, and Raytheon Intelligence & Space. With a 9% year-over-year (Y/Y) increase in sales and a 19% rise in adjusted EPS, RTX has demonstrated resilience and strategic growth in a competitive market.

The aerospace and defense sector has been shaped by global trends such as the recovery of commercial aviation and heightened demand for defense systems. RTX’s strong performance in Q4 2024 reflects these dynamics, with significant contributions from its commercial aftermarket and defense segments. The company’s $218 billion backlog further highlights its robust position in the industry, signaling sustained growth potential in the years ahead.

Q4 2024 Performance Breakdown

Sales and Earnings Growth

RTX reported Q4 2024 sales of $21.623 billion, a 9% increase Y/Y, surpassing consensus estimates of $20.535 billion. Adjusted EPS grew 19% Y/Y to $1.54, exceeding the street view of $1.38. This performance was driven by strong demand across its segments, particularly in defense and commercial aftermarket. The company’s operating cash flow for the quarter totaled $1.6 billion, with free cash flow at $0.5 billion.

RTX’s ability to exceed expectations reflects its strategic focus on innovation and operational efficiency. The company returned $3.7 billion of capital to shareholders in Q4, bringing the total capital returned since the merger to over $33 billion. This commitment to shareholder value has bolstered investor confidence, as evidenced by the 4.49% premarket rise in RTX shares.

Segment Performance

Collins Aerospace reported sales of $7.537 billion, up 6% Y/Y, driven by a 13% Y/Y increase in defense and 12% Y/Y growth in commercial aftermarket. Adjusted operating profit surged 17% Y/Y to $1.207 billion, aided by higher commercial aftermarket and defense volume. Pratt & Whitney saw sales rise 18% Y/Y to $7.569 billion, with adjusted operating profit escalating 77% Y/Y to $717 million.

Raytheon’s sales increased 4% Y/Y to $7.157 billion, supported by higher volume in land and air defense systems, including Global Patriot, NASAMS, and counter-UAS programs. Excluding the divestiture of the Cybersecurity, Intelligence and Services business, sales rose 10% Y/Y. The segment’s adjusted operating profit grew 18% Y/Y to $728 million, reflecting strong execution and demand for its products.

“RTX delivered a very strong year of performance in 2024 with 11 percent organic sales growth and 13 percent adjusted EPS growth, including segment margin expansion in all three businesses.” – Chris Calio, RTX President and CEO

2025 Outlook and Strategic Priorities

Financial Projections

For 2025, RTX expects adjusted sales of $83.0 billion to $84.0 billion, with adjusted EPS projected at $6.00 to $6.15. The company anticipates free cash flow of $7.0 billion to $7.5 billion, reflecting its confidence in sustained growth and operational efficiency. These projections are supported by a $218 billion backlog, with $125 billion from commercial aerospace and $93 billion from defense.

RTX’s outlook is underpinned by strong demand for its products and solutions, driven by the recovery in commercial aviation and increased defense spending globally. The company’s focus on innovation and strategic execution positions it well to capitalize on these trends and deliver value to shareholders.

Industry Trends and Opportunities

The aerospace and defense industry is experiencing a period of transformation, with consolidation and strategic reorganization becoming key themes. RTX’s performance reflects its ability to navigate these trends effectively, leveraging its scale and expertise to drive growth. The company’s emphasis on advancing its strategic priorities—executing on commitments, innovating for growth, and harnessing its breadth and scale—provides a solid foundation for future success.

As global defense spending continues to rise and commercial aviation rebounds, RTX is well-positioned to benefit from these tailwinds. The company’s diverse portfolio and strong backlog ensure that it can meet the evolving needs of its customers while maintaining its leadership in the industry.

Conclusion

RTX’s Q4 2024 performance highlights its resilience and strategic growth in a dynamic market. With strong sales and earnings growth, robust segment performance, and a $218 billion backlog, the company has demonstrated its ability to navigate industry challenges and capitalize on opportunities. RTX’s 2025 outlook reflects its confidence in sustained growth, driven by demand for its products and solutions.

Looking ahead, RTX’s focus on innovation, operational efficiency, and strategic execution positions it well to maintain its leadership in the aerospace and defense industry. As global trends continue to shape the sector, RTX is poised to deliver value to its shareholders and contribute to advancements in aerospace and defense technologies.

FAQ

Question: What were RTX’s Q4 2024 sales and EPS?
Answer: RTX reported Q4 2024 sales of $21.623 billion, a 9% increase Y/Y, and adjusted EPS of $1.54, up 19% Y/Y.

Question: What is RTX’s 2025 outlook?
Answer: RTX expects 2025 adjusted sales of $83.0 billion to $84.0 billion, adjusted EPS of $6.00 to $6.15, and free cash flow of $7.0 billion to $7.5 billion.

Question: How did RTX’s segments perform in Q4 2024?
Answer: Collins Aerospace sales grew 6% Y/Y, Pratt & Whitney sales rose 18% Y/Y, and Raytheon sales increased 4% Y/Y, driven by higher volume in defense systems and commercial aftermarket.

Sources: Benzinga, PR Newswire