Peter Arment — Analyst
“Greg, maybe just switching over to defense, could you maybe just give us a little bit of some of the things you’re expecting for maybe on the international side? Historically Raytheon has had a lot of international awards, what your expectations might be for a book-to-bill and if you’re seeing any kind of increased input from international countries just given the rising tension? Thanks.”
Greg Hayes — Raytheon Chairman and Chief Executive Officer
“Yeah, Peter. It’s a good question, and I think the answer is obviously, we are seeing, I would say, opportunities for international sales. We just have to look to last week where we saw the drone attack in the UAE [by Yemeni rebels], which have attacked some of their other facilities. And of course, the tensions in Eastern Europe [between Ukraine and Russia], the tensions in the South China Sea [between China and Taiwan], all of those things are putting pressure on some of the defense spending over there.”
“So I fully expect we’re going to see some benefit from it. I would say, though, that should should there be hostilities, whether it’s in the Middle East or whether it’s in the Asia-Pacific region you’re not going to see an immediate benefit here because what you’ll see is a reallocation of inventory that we already have out there with the services. But I fully expect we should see a recovery in the international defense spending and a book-to-bill well north of one as we move into 2022 and beyond. One of the biggest drivers, of course, will be LTAMs [Lower Tier Air and Missiles].”
“And I think again, that’s probably a 2023 benefit. We’ll start to see bookings then for LTAMss, which, of course, is the upgrade of the Patriot Missile Defense System, but that’ll be again a couple of years out.”
Neil Mitchill — Raytheon Chief Financial Officer
“Greg, maybe if I could just pile on a little bit, too. We do see some international GMT awards at RMD [Raytheon Missiles & Defense]. And as we look at the $29 billion backlog of RMD and the sales outlook that we put out there, which is low single digit to mid-single digit, think 3% to 4% or so year over year at RMD. We’re confident that we have the backlog to continue to grow as we get through 2022.”
Read more: Raytheon Technologies (RTX) Q4 2021 Earnings Call Transcript
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