RTX.US's profit exceeded Wall Street's expectations in the second quarter.
According to the financial report released on Thursday, the second-quarter profit of aerospace & defense company RTX.US exceeded Wall Street's expectations, as strong demand for air travel boosted its commercial aviation business.
RTX.US Q2 adjusted earnings per share of $1.41, beating the market's forecast of $1.30. The company expects adjusted earnings per share for the full year to be between $5.35 and $5.45, higher than the previously expected maximum of $5.40.
This result shows that RTX.US's new CEO Chris Calio is addressing the growing demand for aircraft parts and services. Supply chain issues are currently hindering suppliers and aircraft manufacturers Boeing (BA.US) and Airbus. In May of this year, Calio took over from long-time CEO Greg Hayes, who remains executive chairman.
RTX.US now expects to generate approximately $4.7 billion in free cash flow this year, lower than the previously expected $5.7 billion and the market's forecast of $5.65 billion.
The company is recalling about 3,000 geared turbofan jet engines produced by its subsidiary Pratt & Whitney due to a defect. This engine is one of two turbofan engines on Airbus's best-selling A320neo series of aircraft.
This maintenance will result in hundreds of A320neo aircraft being grounded in the coming years, impacting airlines such as Spirit Airlines (SAVE.US) and European Wizz Air. RTX.US is also under investigation by the U.S. Securities and Exchange Commission for its recall disclosure.
Cai von Rumohr, an analyst at TD Cowen, cited data from analytics provider Cirium in a July 2 research report, stating that the number of planes grounded for maintenance each year has remained stable at about 540. He said this data is consistent with RTX.US's expectation of a peak in the number of planes grounded in the first quarter, which is lower than the company's original estimate of a maximum of 650.
RTX.US has also been actively evaluating its investment portfolio to reduce debt. Earlier this month, the company agreed to sell a business unit of its Collins Aerospace division to Signia Aerospace, backed by Arcline Investment management. RTX.US also sold its drive and flight control business to Safran Group.
As of press time, RTX.US rose 3.47% in pre-market trading to $108.47.