During its April 23 earnings call, RTX announced a significant shift in focus away from competing to be a prime contractor in the space field. Instead, the company will emphasize its strengths as a supplier of payloads, sensors, and components to other companies.
President and chief operating officer Chris Calio made the announcement, describing this shift as a pivot from being a space prime to being a component supplier. He highlighted the company’s existing strengths in these areas and mentioned that RTX has historical strength in certain space areas, as well as key components used in prime satellites and buses.
In March, RTX withdrew from a fixed-price agreement to build seven missile tracking satellites for the Space Development Agency due to profitability concerns. However, Director Derek Tournear confirmed that RTX-made components will still be used in satellites built by L3Harris and Northrop Grumman. This move was part of RTX’s transition from the space prime role previously, with a focus on a merchant strategy.
Despite facing headwinds in technical learning and testing, RTX plans to overcome these obstacles and continue its shift towards becoming more of a component supplier. In the first quarter, the company reported a loss of about $28 million on classified programs, with Calio indicating that these losses would continue for another 12-18 months. However, he remains optimistic about the future of the company and its ability to overcome these challenges.
