Raytheon Technologies Corp. posted a $3.8 billion loss during 2020’s second quarter, largely due to a pandemic-related drop-off of commercial aviation sales.
The Massachusetts-based company reported its second quarterly earnings following the $180-billion merger completed in April between Farmington-based United Technologies Corp. and Raytheon.
In a Tuesday morning earnings call, Raytheon CFO Anthony O’Brien told investors the company now expects it will take three years for commercial aviation traffic to recover to 2019 levels. He said the second quarter will likely be Raytheon’s worst quarter and the third quarter will probably match it.
However, Raytheon expects the beginning of a gradual recovery to start in the fourth quarter of this year.
“Q2 was a challenging quarter,” O’Brien said. “We expect the rest of the year to be challenging for our commercial aerospace segments, but continue to expect good growth from our defense businesses.”
In the second quarter of 2020, Raytheon lost $3.8 billion or $2.55 per share, compared to a $1.2-billion or $1.38 per share profit in the year-ago period. Raytheon recorded $14 billion in net sales in the second quarter, compared with $11.3 billion a year earlier.
While commercial aerospace sales slumped, as airlines across the world have reduced flights as airline traffic dropped by 96% in April — according to the U.S. Bureau of Transportation statistics — Raytheon’s military segments grew in the second quarter.
During the quarter, Raytheon’s intelligence and space’s sales grew by 9.4%, and its missiles and defense segment increased sales by 11%.
During the Tuesday call, CEO Greg Hayes also touted Raytheon’s defense backlog, which stood at more than $73 billion at the end of the second quarter.
“We’ll be nimble, we’ll remain focused on what we can control,” Hayes said. “We’re going to adapt to the current environment and position our commercial air businesses for growth, while also maintaining solid growth on the defense portfolio.”
