RTX Corp at Morgan Stanley Laguna Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kristine Liwag - Morgan Stanley & Co LLC - Analyst : Great. Great to know that there's no change to the financial outlook for the year. So maybe, Chris, lately, you've talked about your strategic priorities now that you're CEO of the company. Can you talk more about this and other focus areas you've been spending your time on?

Question: Kristine Liwag - Morgan Stanley & Co LLC - Analyst : Thanks, Chris. And maybe digging deeper into the innovation and technology that you highlighted, can you talk more about what's happening in the next-gen propulsion activity? You've had some demonstrator activity, and what's going on there, and also the GTF Advantage. Any color on these programs would be helpful.

Question: Kristine Liwag - Morgan Stanley & Co LLC - Analyst : Thanks, Chris. You kicked off your remarks with the demand picture, but let's dig a little deeper into the macro backdrop. Can you talk about what you're seeing in aerospace and the defense end markets? What are the key drivers of growth and key items to watch?

Question: Kristine Liwag - Morgan Stanley & Co LLC - Analyst : And so Chris, just wrapping up on defense, it sounds like you've got solid activity with the $8 billion of orders in a quarter. But you've also got visibility into additional programs that would create a positive inflection point. Is that fair?

Question: Kristine Liwag - Morgan Stanley & Co LLC - Analyst : Great. So maybe pivoting to Collins Aerospace, you had recently a change in leadership. How should we take that into context? Do we expect to see a change in strategy as well? And then also, for Collins, you've got pretty good profit year to date so far, and cost reduction is a key initiative in terms of getting higher earnings power in the future. Can you talk about additional levers for Collins Aerospace going forward?

Question: Kristine Liwag - Morgan Stanley & Co LLC - Analyst : Great. Thanks, Chris. Switching gears, pun intended, to the Geared Turbofan. As you know, a Geared Turbofan question would be expected at this point.

Question: Kristine Liwag - Morgan Stanley & Co LLC - Analyst : Tried to put it in the middle. How's the fleet management plan going and what KPIs should we watch? How's the program progressing?

Question: Kristine Liwag - Morgan Stanley & Co LLC - Analyst : Thanks, Chris. And outside the GTF, focusing back on Pratt, you touched a little bit on what you're seeing, the military activity and in the V2500. Can you talk more about the drivers of earnings there and how we should think about their contribution to the segment?

Question: Kristine Liwag - Morgan Stanley & Co LLC - Analyst : Great, and let's pivot back to Raytheon defense. You've got a pretty good start of the year, 10% organic, I guess; good organic sales growth; 10% margin in the second quarter. But you've got a $51 billion backlog. What are the key obstacles for you in terms of delivering more -- converting this backlog into revenue? And what are the obstacles for getting margins higher than that 10%?

Question: Kristine Liwag - Morgan Stanley & Co LLC - Analyst : Thanks, Chris. And going back to the RTX level, you guys have put out $36 billion to $37 billion of capital return that you've reaffirmed. How do we think about your strategy and capital return? What are the priorities here?

Question: Kristine Liwag - Morgan Stanley & Co LLC - Analyst : Great. And maybe looking at the portfolio -- I mean, you touched on this. You've seen a lot of changes in the previous UTC Aerospace business, Goodrich, Rockwell Collins, BE Aerospace. And there's also the integration with Raytheon defense. I mean, the past -- plus, you've got COVID somewhere in there too. So there's been a lot of disruption, and there's a lot of integration going on with the company. Can you give us an idea what's the state of the portfolio today? Where are you in this integration journey? And ultimately, what do you think is an underappreciated piece of the RTX investment story today?

Question: Kristine Liwag - Morgan Stanley & Co LLC - Analyst : Great. Thanks Chris. And we've got time for one last question so maybe circling back on some of the innovation technology items you talked about earlier, which one of these initiatives are you most excited about?

Question: Kristine Liwag - Morgan Stanley & Co LLC - Analyst : Well, great. Thank you very much, Chris. Thank you for joining us today on this lovely Laguna location. And with that, this concludes our presentation on RTX this morning. Thank you very much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 11, 2024 / 3:45PM, RTX.N - RTX Corp at Morgan Stanley Laguna Conference