On Tuesday, Raytheon Technology Corp reported a 4 percent increase in quarterly adjusted profit for the aerospace and defense sector, as the aerospace and defense company experienced strong Chinese demand for commercial aircraft spare parts and services.
The rebound in China was explosive, chief financial officer Neil Mitchell said. We really saw a huge return to domestic China travel - they're nearly at pre-pandemic levels today. A stronger-than-expected travel recovery has necessitated airlines to keep older jets in service for longer, helping companies like Raytheon through sales of spare parts and other aftermarket services.
Raytheon's Pratt Whitney, which makes engines for the Airbus A 320 neo family of aircraft, recorded a 41 per cent increase in adjusted operating profit and 15 per cent rise in adjusted sales in the first quarter. Mitchell said demands from China had benefited Pratt as well.
However, Supply chain snags and labor shortages continued to weigh on the company's missiles and defense business, which reported a 13 per cent drop in adjusted operating profit in the quarter through March.
Because of a strong backlog, Mitchell said, he expects revenue for the defense business to grow in the mid-single digits over the next few years.
Raytheon outlined some details of its previously announced reorganization into three business units, Collins Aerospace, Raytheon and Pratt Whitney. Some communication business lines will move from Intelligence and Missiles to Collins Aerospace unit and some sensing and Imaging businesses will move from Collins unit to Raytheon, the business unit that will be headed by Wes Kremer, current president of Raytheon Missiles Defense.
Raytheon's quarterly sales rose 10 per cent to $17.21 billion, beating Wall Street analysts' predictions of $16.97 billion. The adjusted profit rose to $1.79 billion from $1.72 billion a year earlier.
Continued global airline travel and defense systems demand point to sustained top line growth, Raytheon Chief Executive Greg Hayes said in a statement.
The company posted an adjusted profit of $1.22 per share on a per-share basis. On average, analysts expected a profit of $1.13 per share, according to Refinitiv data.
The company's annual sales outlook was $72 billion to $73 billion and adjusted profit per share forecast of $4.90 to $5.05.