RTX (RTX) Q2 2024 earnings summary

Executive summary

• Q2 2024 delivered strong operational and financial performance, with 10% organic sales growth and robust margin expansion across all segments.

• Adjusted sales reached $19.8B, up 8% year-over-year, and adjusted EPS rose 9% to $1.41; GAAP EPS was $0.08, impacted by $918M in legal charges and a $575M contract termination charge.

• Free cash flow was $2.2B, up sharply year-over-year, and backlog hit a record $206B with a book-to-bill of 1.25.

• Major contract wins included U.S. Air Force and Navy awards, GTF engine orders, and commercial aftermarket agreements.

• Dividend was raised 7%, with a $36–$37B capital return target through 2025.

Financial highlights

• Adjusted sales were $19.8B, up 8% year-over-year; organic sales up 10%.

• Adjusted segment operating profit increased 19%, with margin expansion across all segments; adjusted segment margin reached 11.7%.

• Adjusted EPS was $1.41, up 9% year-over-year; GAAP EPS was $0.08, reflecting legal and contract charges.

• Free cash flow for Q2 2024 was $2.2B, driven by strong collections and lower tax payments.

• Paid down $750M in debt and returned $867M to shareholders, mainly via dividends.

Outlook and guidance

• Full-year adjusted sales outlook raised to $78.75–$79.5B, with 8–9% organic sales growth expected.

• Adjusted EPS guidance increased to $5.35–$5.45, up from $5.25–$5.40.

• Free cash flow guidance revised down to ~$4.7B from ~$5.7B, reflecting legal and contract-related outflows.

• Company expects $1.3B in 2024 cash outflows for the Pratt & Whitney powder metal matter and $1.0B for legal settlements.

• Confident in achieving 2025 cash flow targets, with strong underlying business drivers and end-market demand.