RTX Corporation (RTX) 2024 10-K Earnings Analysis
RTX Corporation2024 Earnings Analysis
71/100
RTX's FY2024 10-K shows $80.7B revenue, $4.8B net income, and 8.1% operating margin across Collins Aerospace, Pratt & Whitney, and Raytheon segments — with the Pratt GTF powder-metal issue that began in 2023 still flowing through MD&A's commercial-aftermarket discussion. The 32.4% goodwill-to-assets ratio reflects the 2020 United Technologies-Raytheon merger, and $4.5B FCF funds the dividend and buyback alongside ongoing GTF-fleet inspection and remediation obligations.
Filing analysis
RTX Corporation 2024 10-K Analysis
This page reads RTX Corporation's 2024 10-K annual report through the EarningsMoat framework: earnings quality, economic moat strength, capital allocation, and key risks. The current overall score is 71/100, or grade C.
RTX Earnings Quality
The earnings-quality module scores 70/100, with Operating Margin: 8.1%, CF/Net Income: 1.50x. The core question is whether reported profit is backed by operating cash flow and recurring business economics. See the earnings quality analysis guide.
RTX Economic Moat Analysis
The moat-strength module scores 80/100, with Engine-Fleet Aftermarket: Multi-decade, Defense Program Franchises: Entrenched. The test is whether the advantage can protect returns after competitors react. Read the economic moat analysis guide.
RTX Free Cash Flow vs Net Income
CF/Net Income: 1.50x is the fastest read on whether accounting earnings turn into cash. The capital-allocation module scores 72/100. For the diagnostic, start with cash flow vs net income.
RTX Key Risks from the Annual Report
The risk module scores 60/100, with GTF Fleet Remediation: Ongoing, Fixed-Price Defense Contracts: Program-specific. The goal is to separate ordinary disclosure from risks that can change margins, cash flow, leverage, or the moat itself.
Is RTX a High Quality Earnings Stock?
Based on this 2024 filing, RTX needs a closer read before it qualifies as a high-quality earnings candidate: the overall grade is C, and the earnings-quality score is 70/100. This is a research screen, not investment advice.
Read the report first
Understand RTX Corporation first, then decide if it belongs on your watchlist
The RTX score, explanation, management facts, and filing sources are all here. When you want to follow more companies, review new-filing changes, or keep notes for the next review, keep more names in your watchlist.
Read the report first
Understand the company first. Keep up with every filing as your list grows.
A single report helps you judge one company. As your watchlist grows, review score, cash flow, moat, and risk changes together instead of repeating the same work.
Keep more names together
When your list grows, keep RTX with the rest of your names and review score, grade, and risk changes over time.
See how to track more namesAsk follow-up questions
Dig into cash conversion, moat evidence, capital allocation, and risk changes without rereading the full 10-K.
Ask a questionExport and revisit records
Save the RTX report as research notes you can revisit before the next filing.
Save research notesCore Dimension Scores
Evaluating competitive strength across earnings quality, moat strength, and risk sustainability
Overall Score Trend
Earnings Quality
Per the FY2024 10-K income statement, operating income of $6.5B on $80.7B revenue gives an 8.1% operating margin. MD&A notes this reflects continued Pratt & Whitney GTF remediation costs (powder-metal issue disclosed since Q3 2023) flowing through aftermarket cost of sales, partially offset by Collins Aerospace commercial-aftermarket strength.
Operating cash flow of $7.2B is 1.50x net income of $4.8B per the FY2024 cash flow statement. The spread reflects GTF-related deferred-cost accounting effects alongside standard depreciation on defense-segment plant and aerospace-program-specific asset bases.
Per the FY2024 10-K segment disclosures, revenue is split roughly equally across Collins Aerospace (avionics, interiors, connectivity), Pratt & Whitney (commercial and military engines), and Raytheon (missile defense, air-and-missile defense, advanced sensors). The three-legged stool gives mix-diversification across commercial and defense end markets.
Per the FY2024 10-K and GTF-specific press releases dating to Q3 2023, Pratt & Whitney continues to execute the PW1100G Geared Turbofan (GTF) powder-metal fleet inspection and repair plan. The cost absorption has been reflected in prior-period charges and ongoing operating costs; MD&A updates the disclosed cash impact estimates through FY2024.
Earnings quality scores 70/100. Per the FY2024 10-K, RTX's $80.7B revenue converts to an 8.1% operating margin — compressed by ongoing PW1100G Geared Turbofan powder-metal remediation costs disclosed since Q3 2023 per Pratt & Whitney's press release and updated in MD&A. The 1.50x CF/NI ratio is supported by aerospace-program deferred-cost accounting and defense-segment depreciation. Segment mix is a balanced three-way split between Collins (aftermarket tailwind), Pratt (GTF headwind plus defense and F135 engine strength), and Raytheon (defense-demand tailwind from air-and-missile-defense programs). The GTF fleet inspection program will cycle through FY2025 and beyond per management's disclosed remediation plan.
Moat Strength
Per the FY2024 10-K and Pratt & Whitney fleet disclosures, the commercial-engine installed base (PW1100G GTF on A320neo family, V2500 on A320ceo family, etc.) generates decades of maintenance, spare-parts, and long-term-service-agreement revenue per engine. The GTF powder-metal issue is a specific remediation event rather than a moat-invalidation.
Per the 10-K, Raytheon's program portfolio includes Patriot air-and-missile defense, Standard Missile-2/-3/-6 series, LTAMDS radar (replacing Patriot radars), and StormBreaker. Pratt's defense portfolio includes F135 engines for F-35. Each program represents a multi-decade relationship with DoD and allied customers per public defense-procurement documentation.
Per the FY2024 segment disclosures, Collins Aerospace provides avionics, interiors (seats, galleys, oxygen), connectivity, actuation, and other cabin and flight-deck systems across Boeing, Airbus, and regional-OEM platforms. Content-per-aircraft expansion is a long-term growth vector as avionics complexity increases.
Goodwill of $52.8B on $162.9B assets equals 32.4% per the FY2024 balance sheet — elevated as a direct consequence of the 2020 United Technologies-Raytheon merger purchase-price allocation. The three-segment franchise rationale for the merger is operational; impairment sensitivity concentrates on segment-level performance over time.
Moat strength scores 80/100. Per the FY2024 10-K, RTX's moat comes in three reinforcing forms: the commercial-engine installed-base aftermarket (multi-decade parts and long-term-service-agreement revenue per PW1100G GTF and legacy V2500 engine in service), the Collins Aerospace content-per-aircraft position across the Boeing and Airbus platforms, and the Raytheon defense-program franchise (Patriot, Standard Missile, LTAMDS, F135 engines for F-35 per public DoD program documentation). The GTF powder-metal issue is a specific remediation event disclosed since Q3 2023 rather than a moat-invalidation. The 32.4% goodwill ratio from the 2020 merger is the principal leverage marker on the balance sheet.
Capital Allocation
Free cash flow of $4.5B (OCF $7.2B minus capex $2.6B) per the FY2024 cash flow statement supports the dividend and buyback program. GTF-remediation cash outflows disclosed in MD&A are a partial offset to the underlying FCF generation.
$2.6B capex on $80.7B revenue equals 3.3% capital intensity per the FY2024 cash flow statement — disciplined for a defense-and-aerospace manufacturer. Program-specific tooling and facility investments are largely expensed under government contract-accounting treatment.
Per the FY2024 10-K capital-return section and concurrent press releases, RTX maintains a regular dividend and executes share repurchases. The Board authorized additional repurchase capacity per prior-year 8-K disclosures; actual repurchase pace is balanced against GTF-remediation cash needs.
Per the FY2024 balance sheet, interest-bearing debt is $41.3B with $5.6B cash. Debt maturities are staggered per the notes; $4.5B FCF plus investment-grade credit capacity supports near-term refinancing needs disclosed in the Liquidity section.
Capital allocation scores 72/100. Per the FY2024 10-K, $4.5B FCF funds the dividend, buyback, and absorbs the disclosed GTF remediation cash outflow. Capex intensity is disciplined at 3.3%. The principal capital-structure consideration is the $41.3B debt stack inherited from the 2020 merger combined with GTF-cycle working capital needs — management's stated priority is maintaining investment-grade credit while honoring the dividend and executing opportunistic buyback.
Key Risks
Per the FY2024 10-K and prior-period 8-K disclosures, the PW1100G Geared Turbofan powder-metal issue requires a multi-year fleet-inspection and rework program. MD&A discloses estimated financial impacts, but airline-customer dispute-and-claim dynamics referenced in trade press create residual tail risk.
Per the 10-K, Raytheon and Pratt defense portfolios include some fixed-price development contracts. Industry-wide inflationary pressure on such contracts has been a recurring discussion topic across the defense sector per trade press. Management describes selective bidding discipline on new fixed-price work.
$52.8B goodwill on $162.9B assets — 32.4% — is concentrated on the reporting units inherited from the 2020 UTC-Raytheon merger. Impairment risk depends on segment-level performance trajectories; the concentration is a structural observation not a near-term concern.
Per the Risk Factors, RTX's defense exports are subject to ITAR, EAR, and partner-country licensing. The geopolitical-tension backdrop cited in the 10-K introduces demand tailwinds in some theaters and compliance risks in others — a dual-edged exposure that management tracks per disclosed compliance-organization staffing.
Risk profile scores 60/100 (higher = safer). Per the FY2024 10-K, the principal watch-items are (1) the ongoing PW1100G Geared Turbofan powder-metal fleet remediation disclosed since Q3 2023 per Pratt & Whitney's press release, where airline-customer dispute dynamics create residual tail risk, (2) fixed-price defense-contract exposure on specific programs (industry-wide pressure referenced in defense-sector trade press), (3) concentrated goodwill (32.4%) from the 2020 UTC-Raytheon merger, and (4) the dual-edged export-control and sanctions framework governing defense-customer relationships. None individually is catastrophic; the cumulative load defines the risk score.
Management
Ask about this section
Ask one question here. Keep digging when the issue needs more work.
This analysis is for educational purposes only and does not constitute investment advice.