Raytheon Technologies(US:RTX)2026-01-27 11:57Financial Performance - RTX reported fourth quarter 2025 sales of $24.2 billion, up 12% year-over-year, and full year sales of $88.6 billion, up 10% year-over-year[6][9] - GAAP EPS for Q4 2025 was $1.19, reflecting an 8% increase from $1.10 in Q4 2024, while full year GAAP EPS was $4.96, up 40% from $3.55[9][6] - Adjusted EPS for Q4 2025 was $1.55, a 1% increase from the prior year, and full year adjusted EPS was $6.29, up 10% year-over-year[6][9] - Net sales for Q4 2025 reached $24,238 million, a 12% increase from $21,623 million in Q4 2024[28] - Operating profit for Q4 2025 was $2,596 million, up 23% from $2,111 million in Q4 2024[28] - Net income attributable to common shareholders for Q4 2025 was $1,622 million, compared to $1,482 million in Q4 2024, reflecting a 9% increase[28] - Basic earnings per share (EPS) for Q4 2025 was $1.21, up from $1.11 in Q4 2024, representing a 9% growth[28] - Consolidated net sales for the quarter ended December 31, 2025, reached $24,238 million, an increase from $21,623 million in the same quarter of 2024, representing a growth of 7.5%[29] - Operating profit for the total segments was $3,060 million for the quarter ended December 31, 2025, compared to $2,434 million in the same quarter of 2024, reflecting a year-over-year increase of 25.6%[29] - Net income for the twelve months ended December 31, 2025, was $7,069 million, significantly higher than $5,013 million for the same period in 2024, representing a growth of 40.9%[31] - Total adjusted net sales for the twelve months ended December 31, 2025, reached $88,603 million, a 9.0% increase from $80,738 million in 2024[33] Cash Flow and Liquidity - Operating cash flow for Q4 2025 was $4.2 billion, with free cash flow of $3.2 billion, representing a 549% increase from $492 million in Q4 2024[9][8] - Free cash flow for the quarter ended December 31, 2025 was $3,195 million, a significant increase from $492 million in the same quarter of 2024[38] - For the twelve months ended December 31, 2025, free cash flow reached $7,940 million, compared to $4,534 million in 2024, reflecting a year-over-year growth of 75%[38] - The company reported a net cash flow from operating activities of $4,165 million for the quarter ended December 31, 2025, compared to $1,561 million in the same quarter of 2024, indicating a substantial increase of 167.5%[31] - The company reported net cash flows from operating activities of $10,567 million for the twelve months ended December 31, 2025, up from $7,159 million in 2024[38] Segment Performance - Collins Aerospace reported Q4 2025 sales of $7.736 billion, up 3% year-over-year, driven by a 9% increase in commercial OE and a 13% increase in commercial aftermarket[11][12] - Pratt & Whitney's Q4 2025 sales were $9.496 billion, a 25% increase year-over-year, supported by a 28% rise in commercial OE and a 30% increase in military sales[16][17] - Raytheon reported Q4 2025 sales of $7.657 billion, up 7% year-over-year, driven by higher volume in land and air defense systems[18][19] - Collins Aerospace segment reported net sales of $7,736 million for the quarter, an increase from $7,537 million in the same quarter of 2024[32] - Pratt & Whitney segment net sales increased to $9,496 million from $7,569 million year-over-year, reflecting a growth of 25.5%[32] - Raytheon segment net sales were $7,657 million, up from $7,157 million in the same quarter of 2024, marking a 7.0% increase[32] Guidance and Future Outlook - For full year 2026, RTX expects adjusted sales between $92.0 billion and $93.0 billion, with organic sales growth projected at 5% to 6%[6] - Adjusted EPS guidance for 2026 is estimated to be between $6.60 and $6.80, with free cash flow expected to be between $8.25 billion and $8.75 billion[6] - The company anticipates continued growth in adjusted net sales and operating profit, although specific forward-looking guidance is subject to variability[25] Costs and Expenses - The total costs and expenses for Q4 2025 were $21,948 million, an increase from $19,770 million in Q4 2024[28] - Interest expense for Q4 2025 was $400 million, down from $486 million in Q4 2024, indicating improved cost management[28] - Research and development expenses for Q4 2025 were $789 million, slightly down from $808 million in Q4 2024[28] Strategic Initiatives - The company is focused on strategic initiatives such as digital transformation and operational efficiency to enhance future performance[25] - The company’s backlog reached $268 billion, with $161 billion in commercial and $107 billion in defense[6] Balance Sheet Highlights - Cash and cash equivalents increased to $7,435 million as of December 31, 2025, up from $5,578 million a year earlier, marking a growth of 33.3%[30] - Total assets rose to $171,079 million as of December 31, 2025, compared to $162,861 million in 2024, indicating an increase of 5.5%[30] - Total current liabilities increased to $58,784 million as of December 31, 2025, from $51,499 million in 2024, reflecting a rise of 14.2%[30] - Total liabilities amounted to $103,941 million as of December 31, 2025, up from $100,903 million in 2024, which is an increase of 2.0%[30] - The company’s total equity increased to $67,102 million as of December 31, 2025, compared to $61,923 million in 2024, representing a growth of 8.4%[30] Non-Recurring Items - The company incurred a net pre-tax charge of approximately $0.1 billion related to a customer bankruptcy at Pratt & Whitney for the twelve months ended December 31, 2025[45] - A pre-tax gain of $0.1 billion was recorded for the sale of the Simmonds Precision Products business at Collins during the quarter ended December 31, 2025[45] - The twelve months ended December 31, 2025 included a non-cash pre-tax pension settlement charge of $0.3 billion related to a buy-out conversion of a group annuity contract[46]