Shares of Raytheon Technologies Corporation (RTX) fell 6.8% during Tuesday’s trading session after the aerospace and defense company reported mixed results for the third quarter of 2021.
Adjusted earnings of $1.26 per share increased 125% on a year-over-year basis and handily outpaced the Street estimates of $1.08 per share. Revenues jumped 10% to $16.2 billion but lagged analysts’ expectations of $16.4 billion. (See Raytheon stock chart on TipRanks)
The company’s Pratt & Whitney segment sales surged 35% year-over-year, driven mainly by higher shop visits and related spare part sales and commercial engine deliveries. Collins Aerospace segment sales grew 7%, fueled by the recovery of commercial air traffic.
Backlog at the end of the third quarter was $156.1 billion, of which, $91.1 billion was from commercial aerospace and $65 billion was from defense.
Raytheon’s Chairman and CEO, Greg Hayes, said, “During the quarter, we announced strategic acquisitions that advance our technology focus areas and made significant progress on several key programs… Our strong performance this year along with the positive trends in our end markets gives us the confidence to again raise our 2021 adjusted EPS outlook.”
For fiscal 2021, the company expects sales to be around $64.5 billion, compared to the prior projection of $64.4 – $65.4 billion. The adjusted earnings guidance range of $4.10 – $4.20 per share was revised upward from the prior assumption of $3.85 to $4.00 per share.
On October 7, Jefferies analyst Sheila Kahyaoglu maintained a Buy rating on Raytheon with a price target of $105. The price target implies 17.8% upside potential from current levels.
Based on the 9 Buys and 1 Hold rating, the stock has a Strong Buy consensus rating. The average Raytheon price target of $103 implies 15.5% upside potential from current levels. (See Analysts’ Top Stocks on TipRanks)
RTX scores an 8 out of 10 on TipRanks’ Smart Score rating system, suggesting that the stock is likely to Outperform market averages.