By Shivansh Tiwary and Mike Stone
(Reuters) -Raytheon Technologies Corp on Tuesday reported lower-than-expected second-quarter revenue, as global supply chain issues dented production at the aerospace and defense firm.
Higher costs, supply chain snags, and early spring COVID-19 outbreaks have negatively impacted output both at Raytheon (NYSE:RTN) and its suppliers.
Raytheon shares were down 2.7% to $91.84 in early trading.
"We're obviously working through some of these, supply chain inflation and labor availability challenges that we've talked a lot about. We expected supply chain to ease up this year in the second quarter. And we just did not see that happen," Chief Financial Officer Neil Mitchill told Reuters in an interview.
The Arlington, Virginia-based company reported net sales of $16.31 billion in the quarter, missing Wall Street estimates of $16.60 billion.
However, adjusted earnings of $1.16 per share beat estimates of $1.12, Refinitiv data showed.
For the full year, Raytheon reaffirmed its previously provided outlook for revenue and profit.
Its Collins Aerospace unit, which makes both commercial and military jet parts, reported a 10.3% rise in quarterly sales.
On a post-earnings conference call, Raytheon CEO Greg Hayes said Russian sanctions and resulting titanium supply chain challenges meant the company's Pratt and Whitney engine unit would fall short on deliveries for business jet customers but recover by mid-2023.
On the defense side, Mitchill expected the second half of the year to remain a challenge due to rocket motor supply chain problems as well as labor and microprocessor shortages.
The company is seeing requests for more missile defense products, Mitchill said, but does not expect that interest to turn into revenue in the near term.
Last week, weapons maker Lockheed Martin Corp (NYSE:LMT) had lowered its 2022 revenue and profit targets and earnings per share targets in part due to supply disruptions.