RTX (NYSE:RTX) FY Conference Transcript

Summary of RTX FY Conference Call - November 13, 2025 Company Overview - Company: RTX (NYSE:RTX) - Segments: - Pratt & Whitney - Collins Aerospace - Raytheon Key Financial Performance - Q3 Performance: - 13% top-line organic sales growth - Aftermarket sales up 18% - Defense and Original Equipment (OE) sales up 10% each - Free Cash Flow: - $4 billion in Q3, on track for $7-$7.5 billion for the full year - Sales Guidance: - Expected sales between $86.5 billion and $87 billion - Adjusted earnings per share projected at $6.10-$6.20 [4][5][6] Demand and Backlog - Backlog: - $251 billion, not including significant defense demand - Government Reopening: - Positive impact on fourth-quarter performance, reducing risks associated with government shutdowns [8][10] Defense Sector Insights - Defense Growth: - 10% growth in defense segment in Q4 - Strong demand for munitions and defense systems, particularly in the U.S. and Europe - Investment in Capacity: - $300 million investment in Raytheon for capacity expansion - Focus on synchronizing supply chain with delivery profiles [31][45][46] Commercial Aerospace Insights - Production Rates: - 8%-10% increase in Pratt's output for new engines - 16% sales increase in Collins Aerospace - GTF Engine Production: - 55% increase in production since 2019 - Anticipated 30% year-over-year increase in PW-1100 engine output [61][75] Pension and Financial Management - Pension De-risking: - Transferring $2.5 billion of pension obligations to an insurer, resulting in a one-time non-cash charge of approximately $300 million in Q4 - Long-term Financial Outlook: - Anticipated $200 million year-over-year decline in non-service pension income, but not affecting adjusted earnings per share [19][20][38] Working Capital and Inventory Management - Inventory Management: - Focus on reducing working capital, particularly inventory - Digital tools being employed to improve material allocation and visibility [25][29] Capital Allocation Strategy - Investment Focus: - Over $2.5 billion in CapEx and nearly $3 billion in R&D annually - Prioritizing dividends and debt reduction, with $5.78 billion of debt paid down so far [86][87] Conclusion - Overall Outlook: - Strong momentum heading into 2026 with a focus on execution and capitalizing on growth opportunities in both defense and commercial sectors - Market Position: - RTX is well-positioned to meet increasing demand and enhance operational efficiency through digital transformation and strategic investments [34][88]