RTX Posts Strong 4Q'23 Earnings.

RTX , reported better-than-expected 4Q'23 earnings. The recovery in commercial air traffic and increased global defense spending contributed to improved margins in its aftermarket service and defense business lines. The company's shares were trading 4.45% higher before the bell.

RTX's aftermarket business benefited from airlines extending the use of their planes to meet increased travel demand, coupled with a shortage of new jets. 普惠 , an RTX subsidiary, saw a 25% jump in operating profit in the reported quarter. This was attributed to an ongoing inspection drive to check for potentially flawed components in its geared turbofan jet engines, specifically related to a powder metal used in engine parts.

The company's defense arm, Raytheon , reported a 14% rise in operating profit, driven by the demand for AMRAAM rockets and Patriot systems, which were key weapons used by Ukraine to repel Russia's invasion. U.S. defense companies, including RTX, are experiencing increased contracts due to geopolitical tensions, the Russia-Ukraine war, support for allies in the Middle East, and concerns about Chinese aggression.

While RTX forecasted 2024 profit in the range of $5.25 to $5.40 per adjusted share (slightly above analysts' estimate), it reported 2024 revenue below expectations due to lingering supply challenges in the global aerospace industry. The company expects revenue between $78 billion and $79 billion, falling short of analysts' average expectation of $79.67 billion. Despite this, RTX's adjusted net income for the fourth quarter was $1.29 per share, surpassing analysts' estimate of $1.24 per share, with sales at $19.93 billion, beating Street expectations of $19.7 billion.