RTX Earnings: Powdered Metal Dust Settling, Other Liabilities Written Off; Valuation Up $2 to $117

RTX announced second-quarter 2024 results mostly close to our expectations, though revenue at Pratt & Whitney again outpaced our forecast because the firm accelerated deliveries of new GTF engines in the quarter. The company also reported good progress resolving fallout from its powdered-metal-related recall of GTF engines, though the maintenance plan won't conclude for a few more years, and it is writing off some legal liabilities and a problematic development contract that predate the mega-merger that formed the company. While we revised our full-year forecast for Pratt & Whitney revenue upward, our profit expectations haven't moved much, so our fair value estimate has increased to $117 from $115 primarily due to the time value of money.