Raytheon Cloaks Sales of $14.1B in 2Q 2020, backlog at $158.7B

Raytheon Technologies has recorded $14.1 billion sales in the second quarter of 2020 while backlog stands at $158.7 billion.

Earnings Per Share (EPS indicates profitability), from continuing operations was a loss of $2.56 and included $2.96 of net significant and/or non-recurring charges and acquisition accounting adjustments, where $2.34 was related to charges due to the current economic environment primarily driven by the COVID-19 pandemic, the company said in its Q2 2020 financial report on July 27.

Of the $2.34, $2.13 was related to an impairment of Collins Aerospace goodwill and intangibles. Other adjustments included $0.28 for acquisition accounting adjustments primarily related to intangible amortization and $0.21 for restructuring. Adjusted EPS was $0.40.

The company recorded a net loss from continuing operations in the second quarter of $3.8 billion, and included $4.4 billion of net significant and/or nonrecurring charges and acquisition accounting adjustments. Adjusted net income was $598 million. Operating cash flow from continuing operations in the second quarter was $210 million and better than expected primarily due to the timing of collections and execution on cash conservation actions. Capital expenditures were $458 million, resulting in a free cash outflow of $248 million. Free cash flow included $165 million of merger costs and restructuring.

Backlog, that refers to a company's sales orders waiting to be filled or a stack of financial paperwork, was $158.7 billion. Of this, $85.6 billion was from commercial aerospace and a record $73.1 billion was from defense.

Notable defense bookings during the quarter included:

• $2.3 billion on the Army Navy/Transportable Radar Surveillance-Model 2 (AN/TPY-2) radar program for the Kingdom of Saudi Arabia (KSA) at Raytheon Missiles & Defense (RMD)
• $1.4 billion on a number of classified programs at Raytheon Intelligence & Space (RIS)
• $299 million for Standard Missile-3 (SM-3) for the Missile Defense Agency (MDA) and an international customer at RMD
• RMD’s selection by the U.S. Air Force to develop the Long-Range Standoff Weapon (LRSO)

Raytheon reported a combined book-to-bill ratio of 1.20 at RIS and RMD segments. The value of the ratio is above one, meaning, more orders were received than filled, indicating strong demand.