RTX shifting away from space prime contracts

By Shelley K. Mesch / April 23, 2024 at 10:16 AM

RTX won't seek many prime contracts for space products and will instead focus on component supply to other primes, Chief Operating Officer Chris Calio said today during the company's first-quarter earnings call.

Despite “historical strength” as a prime in some of the “exquisite” space areas, the company's current strengths lend better to supplying key space components to other primes, said Calio, who will step up as CEO next month.

“When you look at our strengths in that portfolio, I think that pivot is the right one,” Calio said.

RTX also completed the sale of its Cybersecurity, Intelligence and Services business during the first quarter for $1.3 billion, according to the earnings report. Reuters previously named private equity firm Blackstone as the buyer.

The cybersecurity business is now called Nightwing, RTX spokeswoman Alyssa Schaffer said, and is not affiliated with RTX. John DeSimone, who had been president of the business unit at RTX, is the CEO of Nightwing.

In its Collins Aerospace business, RTX reported a $175 million charge to secure alternative titanium supply lines. As Russia has been a top producer of titanium, Collins signed agreements with two new suppliers in the first quarter, Calio said.

The new agreements came about from Canada’s imposition of new sanctions in February of U.S.- and Germany-based but Russian-owned businesses that Collins had previously bought titanium from.

“As we’ve talked about since 2022 [when Russia launched a full-scale invasion of Ukraine], we’ve been evaluating our global sourcing strategies to mitigate the potential impact of sanctions and other restrictions,” Calio said. “Frankly, we’ve de-risked that in many areas, and I think this is an important step in putting this issue behind us.”