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RTX (NYSE:RTX) inched 0.46% higher on Monday ahead of its first-quarter results on April 23rd, before the opening bell, with investors looking for further confirmation that the GTF recall is on track.
The aerospace and defense company is expected to post a quarterly EPS of $1.23 (+0.8% Y/Y) along with a revenue of $18.4B (+7.0% Y/Y).
“We are slightly below consensus, but this is mostly on below the line items. More importantly, we think RTX may be close to confirming peak Aircraft On Ground (AOGs) by its Q1 call, and at the very least should be able to confirm changes to the schedule with FAA’s final AD now published,” said analysts at Wells Fargo.
“We think peak grounded airplanes is the key catalyst for the stock,” the financial services company added.
In 2023, RTX saw a massive recall of about 600–700 of the Geared Turbofan engines made by its unit Pratt & Whitney to be checked for microscopic cracks in the next three years for an estimated cost of up to $7B.
Analysts at brokerage Susquehanna said, “The near-term timing of AOGs stemming from the GTF engine rework remains front of mind for investors, RTX maintains the expectations laid out for AOGs (350 on average) and turnaround times.”
In its previous quarterly results, RTX saw its shares rise after topping expectations, aided by the performance of its aviation segment. Meanwhile, RTX’s defense sales rose 4% organically.
For the first quarter, Susquehanna expected Collins Aerospace Q1 revenue to be $6.7bn (+9.0% Y/Y) and combined Raytheon segment Q1 revenue to be $6.5bn (+4.0% Y/Y).
Over the last two years, RTX has beaten EPS estimates 100% of the time and has beaten revenue estimates 50% of the time.
Over the last three months, EPS estimates have seen nine upward revisions and one downward. Revenue estimates have seen three upward revisions and seven downward.
