RTX Corp. stock saw a surge of 7.8% in premarket trades on Tuesday following the announcement that it had exceeded analyst estimates for adjusted profit, initiated an accelerated stock buyback program, and sold a unit for $1.3 billion.
Third-Quarter Loss Due to Repair Costs
During the third quarter, RTX Corp. faced challenges as it encountered repair costs of $1.53 per share. These costs were attributed to the presence of microscopic contaminants discovered in Pratt & Whitney turbines, as well as other one-time expenses. The company reported a loss of $984 million, or 68 cents per share, for the quarter. In comparison, RTX Corp. had earned $1.39 billion, or 94 cents per share, in the same period the previous year.
Exceeding Expectations with Adjusted Profit
Despite the third-quarter loss, RTX Corp. managed to exceed expectations with an adjusted third-quarter profit of $1.25 per share. This surpasses the FactSet consensus estimate of $1.22 per share.
Decrease in Revenue
Revenue for the quarter experienced a decline of 21%, totaling $13.46 billion. This decrease includes a charge of $5.4 billion associated with the previously disclosed Pratt powder metal matter. Analysts had anticipated revenue to be just under $18.6 billion.
Accelerated Share Repurchase Program Approved
To further strengthen its position, RTX Corp. has approved a $10 billion accelerated share repurchase program, set to commence almost immediately.
Revised Projections for 2023 Profit
Looking ahead, RTX Corp. anticipates adjusted profit for 2023 to range between $4.98 and $5.02 per share, compared to their initial projection of $4.95 to $5.05 per share. This differs slightly from the analyst estimate of $5.01 per share.
Sale of Raytheon Segment
In other news, RTX Corp. announces the sale of its cybersecurity, intelligence, and services business within its Raytheon segment for $1.3 billion. The buyer’s identity has not been disclosed.