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RTX's quarterly profit rises on strong demand for aircraft parts, repair
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RTX's quarterly profit rises on strong demand for aircraft parts, repair
Jan 28, 2025 4:27 AM

(Reuters) - Aerospace and defense major RTX posted a rise in quarterly profit on Tuesday, as demand for its aircraft parts and repair services benefited from airlines flying older, maintenance-intensive planes to cope with a jet shortage.

Supply chain snags and the resulting lack of certain components are hampering production of new commercial jets, forcing airlines to keep their aged fleets in service to meet booming demand for travel.

Taking the shine off RTX's strong quarter, however, the company's 2025 adjusted sales forecast of between $83 billion and $84 billion fell short of analysts' average estimates of $84.47 billion, according to data compiled by LSEG.

Though the incoming administration led by U.S. President Donald Trump is likely to increase defense spending, investors are concerned about potential budget cuts under the newly formed Department of Government Efficiency (DOGE) headed by billionaire Elon Musk.

Some analysts have underplayed those concerns, arguing Trump's recent comments on acquiring Greenland and taking over the Panama Canal should support the case for increased defense spending.

RTX's Pratt and Whitney unit, which produces engines for Airbus' A320neo jets and competes with CFM International, posted a sales rise of 18% on a profit of $504 million for the fourth quarter.

The unit is currently navigating an issue with its Geared Turbofan (GTF) engines and is conducting an inspection drive for potentially flawed components, leading to the grounding of hundreds of planes in recent months.

Revenue at the company's aerospace and avionics arm Collins Aerospace rose 6% in the reported quarter.

Raytheon, RTX's defense unit, reported a 36% rise in operating profit due to robust demand for its Patriot defense system used on the battlefield in Ukraine to counter missile threats from Russia.

A prolonged Russia-Ukraine war and ongoing conflicts in the Middle East have led countries to bolster their defense spending, stoking higher demand for arms and weaponry.

The Arlington, Virginia-based company reported a 9% rise in quarterly total revenue to $21.62 billion.

It reported a net income of $1.48 billion, or $1.10 per share, compared with $1.43 billion, or $1.05 a share, a year earlier.

(Reporting by Utkarsh Shetti in Bengaluru and Mike Stone in Washington; Editing by Devika Syamnath)

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