Raytheon Technologies’ commercial aerospace business continued to be hit hard by the Covid-19 pandemic as the company reported its third quarter results.
Adjusted sales at Collins Aerospace were down 34 per cent year-on-year in the quarter, to US$4,278 million. Commercial OE was down 44 per cent while commercial aftermarket fell 52 per cent.
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 and lower ADS-B mandate volume.
Collins Aerospace did record adjusted operating profit of US$73 million in the quarter, but this was down 94 per cent year-on-year. The drop was primarily caused by lower commercial aerospace OEM and aftermarket sales volume, Raytheon said.
Pratt & Whitney saw a 28 per cent year-on-year decrease in adjusted sales in the quarter, to US$3,790 million. Commercial OE dropped 30 per cent while the commercial aftermarket was down 51 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 loss of US$43 million was recorded at Pratt & Whitney in the quarter, down 108 per cent year-on-year. This was primarily caused by lower commercial aerospace sales volume and an “unfavourable mix”.
Raytheon’s Intelligence & Space and Missiles & Defense segments were unable to offset the commercial slump, with both recording revenue drops in the quarter. The company remains confident of growth in its defence unit though. Raytheon reported overall adjusted sales of US$15 billion in the quarter.
“We delivered sales that were in line with our expectations as well as better than expected adjusted EPS and free cash flow during the quarter as we achieved approximately US$700 million of cost reduction and US$1.9 billion of cash conservation actions, which was significantly better than our plan,” said Raytheon Technologies’ chief executive officer Greg Hayes.
“We are delivering on our commitments to customers while taking the necessary actions that will equip us to weather the current environment and emerge as a stronger business.
“The long-term business fundamentals and earnings power of Raytheon Technologies remain strong with our balanced portfolio, leading businesses and advanced technologies that combine the best of commercial aerospace and defence.”
Raytheon’s bookings and orders backlog at the end of the third quarter was US$152.3 billion, of which US$82.1 billion was from commercial aerospace and US$70.2 billion from defence.