RTX Corp. (NYSE:RTX)

The financial data reveals several noteworthy trends over the five-year period. Net operating profit after taxes (NOPAT) exhibits significant fluctuations, starting from a substantial negative value in 2020, followed by a sharp increase to positive territory in 2021. Subsequently, NOPAT slightly decreased in 2022 and 2023 before rising notably in 2024. This progression indicates an initial recovery from losses with some volatility, culminating in improved profit performance by the end of the period.

The cost of capital shows a gradual upward trend, rising from 6.61% in 2020 to 7.03% in 2024. Although the increments are moderate, the increasing cost of capital may suggest rising financing costs or increased risk perception over time.

Invested capital has steadily declined over the years, moving from approximately 115.6 billion US dollars in 2020 to about 111.3 billion US dollars in 2024. This downward trend could imply asset divestitures, efficient capital usage, or a strategic reduction in investment base.

Economic profit remains negative throughout the period, despite improvements. The losses decreased substantially after 2020, with economic profit moving from an extreme deficit to smaller negative values in subsequent years. Notably, in 2024, the deficit narrows further, indicating progress towards value creation, though positive economic profit has yet to be achieved. This suggests that while operating profits and capital management have improved, returns have not fully exceeded the cost of capital.

Net Operating Profit After Taxes (NOPAT)

Recovered from a significant loss in 2020 to positive profits from 2021 onward, with some fluctuations and an upward surge in 2024.

Cost of Capital

Incrementally increased each year, implying potentially higher financing costs or increased risk factors.

Invested Capital

Demonstrated a steady decline, indicating possible asset optimization or strategic capital reduction.

Economic Profit

Remained negative but improved markedly from 2020, reflecting better alignment of returns relative to the cost of capital though not yet generating true economic profit.

Net Income (Loss) Attributable to Common Shareowners

The data reveals a significant turnaround in net income over the five-year span. Starting with a substantial loss of $3,519 million in 2020, the company moved to positive net income in 2021, earning $3,864 million. This positive trajectory continued with net income increasing to $5,197 million in 2022. However, there was a notable decline in 2023, with net income dropping to $3,195 million. The year 2024 saw a substantial recovery, with net income rising again to $4,774 million. Overall, the trend shows strong volatility but an underlying recovery and growth following initial losses.

Net Operating Profit After Taxes (NOPAT)

NOPAT also exhibits considerable improvement from 2020 through 2024. It started in negative territory at -$1,590 million in 2020, then sharply increased to $5,054 million in 2021. A slight decrease occurred in 2022, with NOPAT falling to $4,663 million, followed by a further decline to $4,118 million in 2023. In 2024, there was a substantial increase to $6,483 million, marking the highest point during the observed period. This suggests strong operating performance recovery and improved profitability post-2020.

General Observations

Both net income and NOPAT reveal a pattern of initial recovery after a period of losses, with some fluctuations between 2022 and 2023. The company demonstrates resilience with net income and operating profit growing significantly from 2020 lows to much higher figures by 2024. The decline in 2023 warrants attention as it interrupts the otherwise upward trend, but the subsequent recovery indicates an overall positive financial health trajectory.

Income Tax Expense

The income tax expense exhibits variability over the analyzed five-year period. Starting at 575 million US dollars in 2020, it increased notably to 786 million in 2021. However, in 2022, it declined to 700 million before experiencing a further reduction to 456 million in 2023. In 2024, a significant rise to 1181 million occurred, marking the highest level in the period. The fluctuation suggests the influence of changing taxable income, tax rates, or tax planning strategies impacting reported tax expenses.

Cash Operating Taxes

Cash operating taxes show a generally upward trend with some volatility. Beginning at 978 million US dollars in 2020, this figure increased to 1158 million in 2021. A sharp and substantial increase to 2635 million is seen in 2022, more than doubling the previous year’s amount. This peak was followed by a considerable decline to 1197 million in 2023. In 2024, cash operating taxes rose again to 1638 million. This pattern indicates significant fluctuations in actual cash tax payments, potentially reflecting changes in tax regulations, timing of tax payments, or differences between accounting tax expense and cash tax outflows.

Total Reported Debt & Leases

The total reported debt and leases remained relatively stable from 2020 through 2022, with values around 33,800 million US dollars. However, a notable increase occurred in 2023, where the amount rose sharply to 45,587 million US dollars. This increase was followed by a slight decline in 2024 to 43,260 million US dollars, yet still remaining substantially higher than the levels observed in the initial years.

Shareowners’ Equity

Shareowners’ equity showed a slight upward trend from 2020 to 2021, reaching 73,068 million US dollars. It then experienced a minor decrease in 2022, followed by a significant reduction in 2023 to 59,798 million US dollars. In 2024, the equity levels stabilized modestly with a small increase to 60,156 million US dollars, but overall, the equity remained below the earlier period’s highs.

Invested Capital

Invested capital demonstrated a gradual decline over the entire period. From 115,597 million US dollars in 2020, it decreased steadily each year to reach 111,328 million US dollars by 2024. This consistent downward trend suggests a contraction in the company's invested assets or capital base over this timeframe.

Economic Profit

The economic profit, measured in millions of US dollars, shows a significant reduction in losses over the five-year period. Starting from a substantial negative value of -9227 million in 2020, the loss narrows sharply to -2794 million in 2021. Subsequently, the loss increases slightly in 2022 and 2023 to -3284 million and -3421 million respectively, before improving again in 2024 to -1348 million. Overall, there is a clear trend toward decreasing economic losses, indicating some progress in financial performance despite the absence of positive economic profit.

Invested Capital

Invested capital exhibits a gradual decline throughout the examined years. Beginning at 115,597 million US dollars at the end of 2020, it decreases steadily each year to reach 111,328 million by the end of 2024. The reduction in invested capital suggests a contraction in the asset base or possible divestments, which could reflect a strategic repositioning or an ongoing effort to optimize capital utilization.

Economic Spread Ratio

The economic spread ratio, expressed as a percentage, follows a pattern that mirrors the economic profit trend but on a proportional basis. It starts at a notably negative level of -7.98% in 2020, improves markedly to -2.44% by 2021, then slightly deteriorates over the next two years to -2.9% in 2022 and -3.05% in 2023. In 2024, the ratio shows a considerable improvement to -1.21%. Though the ratio remains negative throughout, the trend indicates a narrowing gap between the return on invested capital and its cost, implying a movement towards enhanced profitability and better economic value creation.

Economic Profit

The economic profit demonstrated a substantial improvement from 2020 through 2024. Initially, the value was significantly negative at -9227 million US dollars in 2020, indicating a considerable loss. Over the subsequent years, this negative figure decreased steadily, reaching -1348 million US dollars by 2024. Although it remained negative throughout the period, the trend suggests a notable reduction in economic losses, signaling improved financial performance or operational efficiency.

Net Sales

Net sales exhibited a consistent upward trajectory over the five-year period. Starting at 56,587 million US dollars in 2020, sales increased annually, culminating at 80,738 million US dollars in 2024. This growth reflects a strong and sustained increase in revenue, which may suggest successful market expansion, increased demand, or favorable pricing strategies.

Economic Profit Margin

The economic profit margin improved markedly from -16.31% in 2020 to -1.67% in 2024. Although the margin remained negative throughout the span, the steady upward trend indicates enhanced profitability relative to sales. This improved margin suggests that the company managed to reduce relative economic losses as a proportion of net sales, implying better cost management or higher operational efficiency over time.