RTX A/S Lowers Fiscal 2023/24 Earnings and Revenue Forecasts

RTX A/S has lowered its FY23/24 financial forecasts due to a lack of expected revenue growth in the third quarter. The company now projects a range of -$40 million to -$30 million for EBIT and break even to $10 million for EBITDA, down from previous estimates of $5 million to $20 million and $45 million to $60 million, respectively. Revenue projections have also been reduced to $500 million to $510 million from $580 million to $630 million. RTX A/S attributes the revision to lower-than-expected revenue in the third quarter, estimating quarterly revenue at $130 million.

The Danish aerospace and defense company, RTX A/S (NYSE: RTX), announced on January 23, 2024, a significant reduction in its financial forecasts for FY23 and FY24 due to lower-than-expected revenue growth in the third quarter [1]. In contrast to the previous estimates, the company now projects a range of -$40 million to -$30 million for EBIT and break-even to $10 million for EBITDA. RTX A/S attributes this revision to a weaker-than-anticipated third quarter, estimating quarterly revenue at $130 million.

RTX A/S reported a strong start to the year with sales of $19.9 billion for Q4 2023, representing a 10% increase compared to the same period in 2022 [1]. However, the company's financial performance for the year took a hit due to a series of challenges, including the impact of the previously disclosed Pratt powder metal matter [1]. Consequently, the company reported GAAP EPS of $1.05 for the full year 2023 and adjusted EPS of $1.29, reflecting a decrease of 36% and 6% compared to the prior year, respectively [1].

Despite the challenges faced in 2023, RTX A/S managed to achieve significant milestones. The company reported a record backlog of $196 billion, including $118 billion in commercial and $78 billion in defense [1]. RTX A/S also repurchased $12.9 billion of its shares during the year [1].

Looking ahead, the company expects to generate sales of $78.0-$79.0 billion in FY24, down from the previous estimates of $74.3 billion [1]. The adjusted EPS for FY24 is projected to be in the range of $5.25-$5.40, while free cash flow is expected to be approximately $5.7 billion [1].

The revision in RTX A/S's financial forecasts comes at a time when the global aerospace and defense industry is experiencing a period of transition. The ongoing COVID-19 pandemic and geopolitical tensions have disrupted supply chains and affected customer demand, leading to uncertainty in the market [2]. Despite these challenges, RTX A/S remains optimistic about its future prospects and is committed to delivering innovative solutions to its customers.

References:
[1] RTX Reports 2023 Results and Announces 2024 Outlook. (2024, January 23). Retrieved from https://www.rtx.com/news/news-center/2024/01/23/rtx-reports-2023-results-and-announces-2024-outlook
[2] Global Aerospace and Defense Market Size, Share & Trends Analysis Report By Platform Type, By End Use, By Region And Segment Forecasts, 2021 - 2028. (2021). Grand View Research. Retrieved from https://www.grandviewresearch.com/industry-analysis/aerospace-and-defense-market