Signal: RTX announced a drop in profits in its third quarter financials

American multinational aerospace and defense conglomerate RTX reported third-quarter results on Oct. 24, with sales down $13.5 billion, down 21 percent from last year, with $5.4 billion of that decline related to a manufacturing issue with metal dust in engineering parts, which lead to inspections and engine removals from a batch of running engines in August and September.

The the company also announced that it had entered into a definitive agreement to sell Raytheon’s Cybersecurity, Intelligence and Services business for approximately $1.3 billion.

During the call, RTX CEO and President Greg Hayes provided an update on the dust metal issue, stating that during the early stages of engine inspections and PW1100 engine removals the outlook for both the financial as well as for functions were in line with expectations. Chief Operating Officer Chris Call added that the powder metal issue is the company’s “highest priority” and that the outlook for fleet management and financial implications remains intact.

Adjusted sales rose $19.0 billion, a 12% increase over last year, which Hayes credited to historic demand across the defense and aerospace industry. Adjusted earnings per share were $1.25, up 3% from the prior year.

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Raytheon posted operating profit of $560 million, down 18% from a year earlier.

Neil Mitchell, RTX’s chief financial officer, said military sales for the Collins division were down 1 percent “primarily due to the timing of deliveries,” but higher military sales at the Pratt & Whitney division had boosted its operating profit from a previous range $200 million to $275 million.

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