Raytheon Company has reported a healthy order book with a book-to-bill ratio of 1.44 and backlogs at the end of first quarter 2020 valued at $51.3 billion.
In June 2019, United Technologies Corp (UTC) and Raytheon announced a merger- Raytheon Technologies.
Raytheon Company (not included in Raytheon Technologies' Q1 results) had Q1 net sales of $7.2 billion, up 6.5% over the prior year. Bookings were $10.3 billion, resulting in a book-to-bill ratio of 1.44. The value of the ratio is above one, meaning, more orders were received than filled, indicating strong demand.
Backlog at the end of the Q1 2020 was a record $51.3 billion, an increase of $10.2 billion or up 25% compared to the end of the first quarter 2019, the company said Thursday.
"I'm proud of what our team has done to support our customers and do our part in fighting this global pandemic," said Raytheon Technologies CEO Greg Hayes. "During the quarter, we delivered solid results, exceeding our expectations for adjusted EPS (earnings per share) and free cash flow, while also completing the spin-offs of Otis and Carrier and our merger with Raytheon."
Hayes continued, "Looking ahead, the merits and strategic rationale of the merger are clear. Raytheon Technologies has a diversified portfolio of industry-leading technologies across commercial aerospace and defense with solid positions on key platforms. We have a strong balance sheet, ample liquidity, and are well positioned to deliver value for our shareowners and customers over the long term. We are also making the right moves for the business by taking out costs and making prudent capital allocation decisions to ensure we maintain flexibility and emerge from this crisis strong."
Net sales of Raytheon Technologies (reflects United Technologies results including Otis and Carrier) is $18.2 billion, down 1% over the prior year, including flat organic sales and 1 point of foreign exchange headwind.
Sales at Pratt and Whitney were up 11% over the prior year with Commercial Aftermarket sales up 4%. Sales at Collins Aerospace were down 1% over the prior year with Commercial aftermarket sales up 3%. GAAP (Generally Accepted Accounting Principles) EPS of a loss of $0.10 was down 106% versus the prior year and included $1.88 of net nonrecurring charges and other significant items, including $1.66 related to Otis and Carrier portfolio separation activities. Adjusted EPS of $1.78 was down 7% versus the prior year.
Net income in the quarter was a loss of $83 million, down 106 percent versus the prior year and included $1.6 billion of net nonrecurring charges. Cash flow from operations was $661 million and capital expenditures were $412 million, resulting in free cash flow of $249 million. Free cash flow included approximately $700 million of one-time cash separation payments. Total cash separation payments in the quarter were approximately $1.5 billion, of which approximately $700 million was reflected as a financing outflow, principally associated with make whole payments in connection with the early retirement of debt.
The COVID-19 pandemic has significantly increased global economic and demand uncertainty, and has impacted RTC's businesses, operations and the aerospace sector as a whole. In response, the company took immediate actions to conserve cash and reduce costs and will continue to evaluate further actions.
“The financial impact of the COVID-19 pandemic cannot be reasonably estimated at this time. The extent of such impact depends on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge. Given the ongoing uncertainty regarding the scope, severity and duration of the COVID-19 pandemic, RTC is not providing an outlook at this time and will revisit providing a 2020 outlook at our next earnings release,” the company said.
On April 3, 2020, Raytheon Technologies successfully completed the separation of Otis and Carrier and the merger with Raytheon Company. Following these transactions, Raytheon Technologies had a cash balance of approximately $8.5 billion and a net debt position of approximately $25 billion.