Aviation Business News

Raytheon “well positioned for sustainable growth in 2021” despite Covid-hit Q4 results

Collins Aerospace

Raytheon Technologies’ commercial aerospace business once again struggled in the fourth quarter of 2020 in the wake of the Covid-19 crisis.

Adjusted sales at Collins Aerospace were down 32 per cent year-on-year in the quarter, to US$4,388 million. Commercial OE was down 41 per cent while commercial aftermarket fell 48 per cent.

Collins Q4 results
Collins Aerospace fourth quarter results. Click to enlarge.

Raytheon said the decrease in sales was driven primarily by the current environment which has resulted in lower flight hours, aircraft fleet utilisation and commercial OEM deliveries, as well as the impact of the 737 MAX grounding.

Collins Aerospace did record adjusted operating profit of US$89 million in the quarter, but this was down 92 per cent year-on-year. The drop was primarily caused by lower commercial aerospace OEM and aftermarket sales volume, Raytheon said, and was partially offset by “cost reduction actions and continued synergy capture”.

Pratt & Whitney saw a 20 per cent year-on-year decrease in adjusted sales in the quarter, to US$4,496 million. Commercial OE dropped 46 per cent while the commercial aftermarket was down 32 per cent.

This decrease was attributed primarily to a significant reduction in shop visits and related spare part sales. and commercial engine deliveries “principally driven by the current environment”.

An adjusted operating income of US$105 million was recorded at Pratt & Whitney in the quarter, down 78 per cent year-on-year. This was primarily caused by lower commercial aerospace sales volume and an “unfavourable mix”.

P&W Q4 results
Pratt & Whitney fourth quarter results. Click to enlarge.

Assessing the Raytheon Technologies’ overall results, CEO Greg Hayes said: “We closed the year on a strong note with fourth quarter sales, EPS and free cash flow exceeding our expectations, as we delivered on our customer commitments and drove strong execution against our cost and cash actions.

“As a result, we delivered US$2.3 billion in pro forma free cash flow for the year which includes US$800 million of discretionary pension contributions.

“In 2021, our strategy of harnessing next-generation technologies across our resilient and balanced portfolio will continue to drive differentiated value for customers and advance our industry leadership for years to come.

“Combined with our recent structural actions, we’re well positioned for sustainable growth and profitability in 2021 and beyond, and remain committed to returning US$18 to US$20 billion to shareowners in the four years following the merger.”

Raytheon Q4 results
Raytheon fourth quarter results. Click to enlarge.

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