Why did RTX's surprises shrink in mid-2024?

Raytheon Technologies (RTX) experienced a decline in diluted EPS and net income in mid-2024 compared to the prior year, while revenue showed a slight increase. The company's adjusted sales and EPS for 2024 exceeded expectations, with organic growth driven by strong demand across all three business segments. Despite this, the recent quarter's results fell short of analysts' expectations, leading to a decrease in diluted EPS and net income:

1. **Revenue Growth**: Total revenue for mid-2024 was $19.72 billion, with a year-over-year growth rate of 8.7%. This indicates a healthy business activity and market presence.

|code|Ticker|Name|Date|Total Revenue|Net Income|Diluted EPS|market_code|
|---|---|---|---|---|---|---|---|
|RTX|RTX.N|RTX|2024 Q2|1.9721E10|1.75E8|0.08|169|

2. **Net Income and Diluted EPS**: Net income for the same period was $175 million, reflecting a decrease of 0.87% compared to the previous year. The diluted EPS was $0.08, representing a significant drop of 0.91%. This suggests that while revenue increased, the company's profitability declined.

|code|Ticker|Name|Date|Net Income YoY|Total Revenue YoY|Diluted EPS YoY|market_code|
|---|---|---|---|---|---|---|---|
|RTX|RTX.N|RTX|2024 Q2|-87.12288447387785|7.6767676767676765|-91.11111111111111|169|

3. **Analyst Expectations and Ratings**: The average analyst price target for RTX is $144.22, with a consensus rating of "Buy". This indicates that analysts remain optimistic about the company's future performance, potentially viewing the current dip as a buying opportunity.

4. **Operational Performance and Outlook**: RTX's fourth quarter 2024 results showed reported sales of $21.6 billion, up 9% year-over-year, and adjusted sales of $80.8 billion for the full year 2024, indicating strong sales momentum. The company's 2025 outlook includes continued sales, earnings, and cash flow growth, with adjusted sales expected to be between $83.0 billion and $84.0 billion. This suggests that the company's long-term prospects remain positive, despite the mid-2024 performance.

In conclusion, while RTX experienced a decline in diluted EPS and net income in mid-2024, the company's revenue continued to grow, and analysts remain optimistic about its future performance. The company's strategic priorities and strong backlog position it well for continued growth in 2025.