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The first five quarters since Raytheon and United Technologies UTX 0.0% merged in April of 2020 haven’t worked out quite the way management originally envisioned, but they nonetheless have vindicated the strategy underpinning the transaction.
That strategy, simply stated, was that the company’s best chance of dominating global aerospace was to be a major player in all addressable markets—commercial and military, domestic and international, original equipment and aftermarket.
RTX now has the market footprint it was seeking, but nobody saw coronavirus coming, so commercial business lines expected to drive growth during the early years faltered, while military business bulked larger than anticipated in the mix.
Conditions will shift as the global pandemic fades, with commercial demand reverting to steady growth and military demand likely growing at a slower pace.
An artist's rendering of the Air Force's secret B-21 bomber. Various Raytheon units will provide ... [+]
Wikipedia
There may be a surprise upside in the defense business, for example if Republicans take control of Congress in midterm elections, but most of the growth through 2024 will be on the commercial side, both in supplying new equipment and in maintaining equipment already in operational fleets.
The company’s commercial avionics and engine business is so broadly based that any uptick in global economic activity will likely be beneficial to Raytheon.
One outcome that has gotten little attention but looms as a real possibility later in the decade is that Raytheon could emerge as the nation’s leading aerospace firm.
www.forbes.com
That strategy, simply stated, was that the company’s best chance of dominating global aerospace was to be a major player in all addressable markets—commercial and military, domestic and international, original equipment and aftermarket.
RTX now has the market footprint it was seeking, but nobody saw coronavirus coming, so commercial business lines expected to drive growth during the early years faltered, while military business bulked larger than anticipated in the mix.
Conditions will shift as the global pandemic fades, with commercial demand reverting to steady growth and military demand likely growing at a slower pace.
An artist's rendering of the Air Force's secret B-21 bomber. Various Raytheon units will provide ... [+]
Wikipedia
There may be a surprise upside in the defense business, for example if Republicans take control of Congress in midterm elections, but most of the growth through 2024 will be on the commercial side, both in supplying new equipment and in maintaining equipment already in operational fleets.
The company’s commercial avionics and engine business is so broadly based that any uptick in global economic activity will likely be beneficial to Raytheon.
One outcome that has gotten little attention but looms as a real possibility later in the decade is that Raytheon could emerge as the nation’s leading aerospace firm.
Why Raytheon Technologies Could Become America’s Biggest Aerospace & Defense Business In This Decade
Raytheon's market footprint in aerospace and defense affords options for the future that no rival can match.
www.forbes.com
