RTX, formerly known as Raytheon Technologies, just reported their earnings. Adjusted earnings increased 11.2% to $1.29 per share. Earnings including acquisition accounting adjustments and non-recurring charges rose 2% to 90 cents per share. Sales surged 12% to $18.3 billion, with 12% revenue growth across all business segments. But instead of their stock $RTX go up, it’s down almost 11% today. Why? They are having some problem with their jet-engine.
So what? This might be an opportunity to make some money by understanding what implication it has on other stocks. So which one?
- Spirit Airlines ($SAVE)
- Delta Airlines ($DAL)
- IndiGo ($INDIGO only trading in India)
- Lufthansa ($LHA.XE)
These four are most affected by the jet-engine problem and they might be looking at some additional downtime for their jets due to the engine problem.
As travelers expect delays and cancellations, a short-term boost in revenue for
- Alaska Air ($ALK)
- Southwest ($LUV)
- United ($UAL)
- American ($AAL)
This isn’t a long term trade as we don’t know how severe this problem is and how long it will take them to address them. But if this is similar to a Boeing ($BA) 737 MAX problem before and all of them were grounded, it might be worth making some bets on the four mentioned.
Again, do your own DD before making any investment decisions.