RTX Corporation (NYSE:RTX) stock is taking a beating on Monday after revealing it will suffer a $3 billion charge due to a recall.
According to RTX Corporation, it will suffer a $3 billion pre-tax charge in the third quarter due to a rare condition in powder metal that affected certain engine parts. It also says this will result in charges between $3 billion and $3.5 billion over the next few years, which includes the $3 billion charge coming in Q3.
Neil Mitchill, Executive Vice President and Chief Financial Officer of RTX, said the following about the recall charges:
“The financial charges related to the powder metal manufacturing issue, that will be recognized this quarter, reflect the impact of this matter and how we expect to support our customers. That said, the financial position of RTX remains strong, and we remain well positioned to execute on our strategic priorities.”
RTX Outlook Update
To go along with the recall and charge news, RTX also introduced an updated outlook. This has it expecting adjusted EPS of between $4.95 and $5.05 on revenue ranging from $67.5 billion to $68.5 billion in 2023. For comparison, Wall Street is expecting adjusted EPS of $5.01 and revenue of $73.6 billion for the year.
With today’s news comes heavy trading of RTX stock. That has some 8.3 million shares on the move as of this writing. For the record, the company’s daily average trading volume is about 6.3 million shares.
RTX stock is down 6.7% as of Monday morning.
There’s more recent stock market news traders need to know about below!
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
