RTX (NYSE: RTX) is open to pruning and pairing its existing businesses rather than pursuing “transformative” mergers and acquisitions, the aerospace giant’s CEO said on Wednesday.
Speaking at a conference organized by Morgan Stanley, CEO Christopher Calio pointed to the second-quarter divestment of its Goodrich Hoist and Winch business as an example of the deals the company might do.
RTX emerged from a $121 billion combination of United Technologies Corp and Raytheon Co in 2020 and now houses businesses such as civil aircraft engine maker Pratt & Whitney and aerospace supplier Collins Aerospace.
The company counts plane makers Boeing (NYSE: BA) and Airbus as customers.
Calio said on Wednesday RTX (NYSE: RTX) was working with Boeing on calibrating its production rates for 2025 and beyond as the U.S. planemaker is currently producing its best-selling 737 MAX aircraft at a lower rate due to an ongoing crisis.
“Obviously we’ve got a lot of capacity above and beyond what those rates are today. So making sure that we’re calibrated to where that’s going and that we’ve got the right level of inventory to support that,” he said.
Defense demand continues to be strong, with RTX’s weapons business Raytheon garnering $8 billion in bookings so far in the third quarter, Calio added.
RTX is also working on a hybrid-electric technology demonstrator that combines a thermal engine with an electric motor, aiming to improve fuel efficiency by 30%.
Calio said RTX was focused on the durability of the engine, having learned lessons from recent quality issues surrounding its GTF engines. He sees the next-generation propulsion penetrating the small aircraft market first.
RTX shares were down 1.1% in afternoon trade.
(Source: ReutersReuters)
