What drove RTX's strong earnings performance in 2024?

Raytheon Technologies (RTX) delivered strong earnings performance in 2024, driven by several key factors:

1. Revenue Growth: RTX's revenue grew by 8.51%, reaching $21.62 billion. This increase was primarily driven by the aerospace sector, which saw a 10% increase in revenues, contributing over 30% to the total Q2 revenues. The growth in commercial sales, especially in the aftermarket business, significantly boosted RTX's performance.
2. Operational Efficiency: The company's focus on operational efficiency and cost management contributed to its financial strength. RTX's net income margin for 2024 was $1,743 million, showing improvement from 2023. The company's ROE and ROA stood at 7.96% and 6.21% respectively, indicating effective use of equity and assets to generate profits.
3. Strategic Business Decisions: RTX's strategic business decisions, such as the acquisition of UTC Aerospace Systems, have played a significant role in its growth. The company's diversified business segments, including Pratt & Whitney and Raytheon, contributed significantly to the revenue and profitability.
4. Market Demand and Backlog: Strong demand in the defense and aerospace sectors, coupled with a record backlog of $202 billion, has provided a stable order book for RTX. This backlog, combined with operational modernization and technological innovation, has supported sustained growth and margin expansion.
5. Dividend and Dividend Yield: RTX's consistent dividend payments, with a yield of 2.13%, have attracted income-focused investors, contributing to the stock's premium valuation.

In summary, RTX's strong earnings performance in 2024 was driven by revenue growth, operational efficiency, strategic business decisions, market demand, and a strong backlog, along with consistent dividend payments that attracted investor confidence.