Release Date: January 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Chris, on powder metal and the GTF, there wasn't a lot of discussion. Are we still on track for the $800 million to $1 billion step-down in 2026? A: Christopher Calio, President & CEO: Yes, the outlook remains consistent, and the technical and inspection assumptions are intact. MRO output is key, with a 30% increase last year, and we aim for above 30% growth in 2025. The supply chain is crucial, with improvements in structural castings and isothermal forgings. Our focus is on bending the AOG curve to return assets to customers quickly.
Q: How is Raytheon aligned with new administration spending priorities, especially regarding international demand and replenishment? A: Christopher Calio, President & CEO: Demand for Raytheon's products remains strong, with a $63 billion backlog and a 1.48 book-to-bill ratio. In the US, it's about replenishment, while in Europe, it's about integrated air and missile defense. International demand is robust, with NATO countries committing to increased defense spending, providing a tailwind for us.
Q: Where does RTX stand on the NGAP program, and how does it impact Pratt's financials? A: Christopher Calio, President & CEO: We've been developing our NGAP solution with rigorous testing and are pleased with the results. This funding will help us continue development and reduce risks. Neil Mitchill, CFO: Pratt is expected to see mid-single-digit growth in military sales, with NGAP being a tailwind for the business.
Q: Are there components of the 2025 free cash flow outlook that might normalize or reverse in 2026? A: Neil Mitchill, CFO: We expect a $1.3 billion working capital improvement in 2025, with additional runway for improvement beyond that. There's a one-time international tax payment in 2025, but overall, the $8 billion to $8.5 billion operational baseline is strong.
Q: Can you provide an update on the supply chain constraints and progress over the last 90 days? A: Christopher Calio, President & CEO: Structural castings and isothermal forgings are critical areas, with improvements seen. Collins has focused on microelectronics, and Raytheon is ramping up rocket motors. The interiors business at Collins is recovering, with progress in seating and heat exchangers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.