Common-Size Income Statement
Quarterly Data
RTX Corp., common-size consolidated income statement (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-03), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
- Sales Composition
- Products sales consistently represent the majority of net sales, ranging mostly between approximately 72% and 78%. A notable decline is observed in the third quarter of 2023, where product sales as a percentage of net sales dropped to roughly 64%, followed by a return to around 74%-72% in subsequent quarters. Services sales maintain a complementary share, generally fluctuating between 22% and 28%, with an increase correlated to the dip in product sales in late 2023, peaking at 36% in the same quarter before settling back to mid-20s levels.
- Cost Structure
- The cost of sales for products exhibits volatility, with percentages usually falling in the range of approximately 60% to 70%, but an unusual spike is evident in the third quarter of 2023, where it peaks near 69%. The cost of sales of services remains more stable, mostly between 16% and 19%, but similarly shows an increase at the same period, reaching above 25%. Overall, the combined cost of sales as a percentage of net sales typically lies between 75% and 80%, except for the sharp rise in the third quarter of 2023 to nearly 95%, corresponding with the cost increases in both products and services sales.
- Profitability Metrics
- Gross margin generally fluctuates between 18% and 21%, reflecting a healthy profitability trend with some dips. The most significant outlier occurs in the third quarter of 2023, where gross margin sharply declines to around 5%, coinciding with the spike in cost of sales. Operating profit broadly follows gross margin trends, ranging mostly from 6% to 10%, with a notable negative dip at -10% in the third quarter of 2023. Apart from this anomaly, operating profit demonstrates a stable positive margin.
- Research and Development (R&D)
- R&D expenses generally occupy between 3% and 5% of net sales, showing a gradual tendency to decrease over time, especially into 2024 and 2025, where it settles closer to the 3% level. However, an irregular increase is visible during the third quarter of 2023, reaching over 5%, suggesting a temporary rise in investment in R&D efforts during that quarter.
- Selling, General, and Administrative Expenses (SG&A)
- SG&A expenses reveal variability but mostly range between approximately 6.9% and 10%, with some spikes such as in the third quarter of 2023 reaching 10.4%. Starting from 2024 onward, SG&A expenses display a gradual moderation towards the lower 7% range, indicating improved expense management or operational efficiency.
- Non-operating Items and Income Taxes
- Non-service pension income maintains a steady presence, generally between 1.6% and 3.3% of net sales, with a slight declining trend through 2023 to 2025. Interest expense shows slight variability, consistently near 2% or below, reflecting steady financing costs. Non-operating income and expense present some fluctuations including notable negative and positive quarterly impacts, but usually remain within a narrow band around zero. Income tax expense is mostly negative, ranging between approximately -0.5% and -2% of net sales, with occasional positive tax benefits; a significant positive tax effect is seen in the third quarter of 2023.
- Net Income Analysis
- Net income from continuing operations exhibits a positive trend most of the time, generally lying between 4% and 9%, except for a substantial loss in the second quarter of 2020 where it drops to about -27%, and again in the third quarter of 2023 where it declines below -6%. After these outliers, net income recovers consistently in subsequent quarters, indicating resilience. Total net income, including discontinued operations, closely follows this pattern. Net income attributable to common shareowners tracks similarly, confirming these trends.
- Extraordinary Items
- Two notable irregularities include a substantial goodwill impairment charge recorded in the second quarter of 2020, significantly negatively impacting operating profit and net income in that period. Additionally, a debt extinguishment cost appears in the latter half of 2021, represented as a one-time negative impact but without a prolonged effect on the overall trend.
- Summary of Trends
- The analyzed data reveals overall stability in revenue composition and cost structure, broken by episodic disturbances distinctly visible in 2020 and the third quarter of 2023. Margins and profitability recover following these events, confirming operational resilience. Expenses for R&D and SG&A show gradual moderation over time, indicating better cost control or strategic adjustments. Income tax and non-operating income/expense remain relatively stable but influenced occasionally by exceptional items. The quarter ending in September 2023 stands out as the most disrupted quarter with notable margin compression, elevated costs, and negative income impacts. Overall, the financial data portrays a company managing cyclical and extraordinary challenges while maintaining a predominantly positive profitability trajectory.