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What Awaits Raytheon Technologies (RTX) in Q3 Earnings?

Raytheon Technologies Corp. RTX is set to release third-quarter 2021 results on Oct 26, before market open.

The company delivered an earnings surprise of 11.96% in the last reported quarter. Moreover, Raytheon delivered an earnings surprise of 9.82% in the last four quarters, on average.

Factors to Note

The merger between legacy missile-maker Raytheon Company with multinational conglomerate United Technologies, which resulted in the formation of Raytheon Technologies, completed a year on Apr 3. Consequently, Raytheon Technologies’ third-quarter results are expected to reflect solid merger-related integration activities and also benefit from merger synergies.
Incremental cost synergies from the acquisition of Rockwell Collins are also expected to bolster the company’s soon-to-be-reported quarterly results.

A gradual improvement in global air travel has led to a modest recovery of the commercial aerospace industry in the past few months, which is likely to have boosted the company’s commercial OEM as well as aftermarket sales in the third quarter. Continued higher volume across multiple mission areas is expected to have boosted its defense sales. These factors are expected to have contributed favorably to the company’s overall revenues in the third quarter.

Raytheon’s relentless cost reduction initiatives and a strong focus on operational excellence are expected to have benefited its third-quarter earnings. Moreover, improving trends in commercial aftermarket space are also projected to have favorably contributed to the company’s overall bottom-line growth.

Q3 Expectations

The Zacks Consensus Estimate for Raytheon Technologies’ earnings is pegged at $1.07 on revenues of $16.49 billion, indicating 84.5% and 39.2% improvement from the respective year-ago quarter numbers.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Raytheon Technologies this time around. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for earnings beat. This is not the case here, as given below

Earnings ESP: Raytheon Technologies has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

A Recent Defense Release

Hexcel Corporation HXL reported third-quarter 2021 adjusted earnings of 13 cents per share, which exceeded the Zacks Consensus Estimate of 8 cents by 62.5%.

Stocks to Consider

Here are a couple of defense companies you may want to consider, as these have the right combination of elements to post an earnings beat this season:

Transdigm Group TDG has an Earnings ESP of +2.16% and a Zacks Rank #2.

CAE Inc CAE has an Earnings ESP of +9.46% and a Zacks Rank #3.


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Transdigm Group Incorporated (TDG): Free Stock Analysis Report
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CAE Inc (CAE): Free Stock Analysis Report
Raytheon Technologies Corporation (RTX): Free Stock Analysis Report
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