By Shreyasee Raj and Mike Stone
(Reuters) -U.S. aerospace manufacturer Raytheon Technologies Corp on Tuesday raised its full-year profit forecast and beat quarterly expectations on the back of higher demand for its commercial engines, spare parts and aftermarket services.
Shares of the company, which posted a rise in revenue in all four of its units, were up more than 3.5% in early trading.
As demand for travel returned quicker than expected, airlines have rushed to return planes to skies and recall crews, boosting revenue at its Collins Aerospace and Pratt & Whitney units by 6% and 19%, respectively, on an adjusted basis.
“What really happened in the second quarter is airlines aggressively got back into the business of making sure their fleets were ready for this summer travel season,” Neil Mitchill, Raytheon’s chief financial officer, told Reuters.
However, the recovery could be thwarted by the highly transmissible COVID-19 Delta variant that has led to a rise in cases in several countries, with the United States planning to keep existing travel restrictions despite months of lobbying by airlines.
“The better than expected result at Collins bodes well at this early stage of the aviation recovery,” Vertical Research Partners analyst Robert Stallard said in a note.
Raytheon now expects full-year earnings of $3.85 and $4.00 per share, above its previous forecast of $3.50 and $3.70.
The Waltham, Massachusetts-based company also raised the lower end of its fiscal year revenue forecast to $64.4 billion from $63.9 billion. The upper end of the outlook remains at $65.4 billion.
On an adjusted basis, it earned $1.03 per share in the second quarter ended June 30, beating analysts’ estimate for a profit of 93 cents per share. Net sales rose 13% to $15.88 billion and also topped estimates.
(Reporting by Shreyasee Raj in Bengaluru and Mike Stone in Washington; Editing by Krishna Chandra Eluri and Marguerita Choy)