Raytheon: Defense business will make up about two-thirds of sales this year

The ongoing pandemic, which has dampened commercial air travel, means defense work will make up about two-thirds of Raytheon Technologies' sales this year, rather than about half as initially predicted, according to the company's chief executive.

Greg Hayes spoke last week at a Morgan Stanley conference. While conference organizers indicated the event was not open to the media, it was shared on Raytheon's website and a transcript was made publicly available.

Hayes called the company's defense work "a bright spot in the business."

The "defense businesses will generate about two-thirds of our sales this year; one-third will be commercial aero," he said. "That's a little different than the balance we had originally thought, which was going to be somewhere around 50-50 or maybe 55-45 with defense in the lead."

"With peace breaking out in the Middle East to some extent -- or at least a normalization of relations -- we see opportunities on the international side to provide our partners over there with some of the same technology that we've been providing to the Kingdom of Saudi Arabia and Israel," Hayes continued.

Meanwhile, Hayes told the audience the company is focused on cutting its footprint to reduce costs.

"The longer-term savings really are around footprint," he said. "We've got about 31 million square feet of office space at RTX. Obviously today we're not utilizing very much of it."

"Our goal initially was to reduce that by about 10% -- or 3 million square feet" -- through consolidation and lease exits, Hayes added. "I think we can see maybe a 20% or 25% reduction in office footprint long term. By long term, I mean over the next four to five years as we exit leases and move folks around to lower-cost locations."